Cruise line stocks fell as Two Guests Test Positive for COVID-19

(June 11) Cruise line stocks fell as two guests on Royal Caribbean's Celebrity Millennium ship tested positive for COVID-19.

Airline stocks rose in morning trading.

The duo were on a trip that began in St. Maarten aboard Royal Caribbean's Celebrity Millennium ship. They are asymptomatic and in isolation, RCL said.

Royal Caribbean Group (RCL) -Get Report shares fell Friday after the company said two guests on its Celebrity Millennium ship tested positive for COVID-19.

The two cruisers are asymptomatic and in isolation, RCL said. They were sharing a room and tested positive toward the end of the cruise, which began in St. Maarten.

The trip was one of RCL’s first to resume in the region after the pandemic forced a shutdown in March 2020. RCL said it’s going through contact tracing, conducting testing on all of the duo’s close contacts and is closely monitoring what’s happening on the ship.

RCL recently traded at $88.78, down 2.04%, in pre-market trading on Friday. It has climbed 12% in the past six months amid enthusiasm for reopenings in the cruise industry and the economy as a whole.

In May and early June,the U.S. Centers for Disease Control and Prevention gavetwo RCL ships the nod to do a test sailing in U.S. waters.

Allure of the Seas is set to start test cruises from Port Canaveral July 27 to July 29, and Symphony of the Seas will do the same from PortMiami Aug. 1 through Aug. 3.

In March,RCL announced it would resume Caribbeansailings in June.

Also in March, RCL, Carnival Corp.(CCL) -Get Report and Norwegian Cruise Line (NCLH) -Get Report all received price-target increasesfrom J.P. Morgan, based on the prospect of economic recovery.

J.P. Morgan analyst Brandt Montour lifted his target price on RCL to $110 from $100,

“We … raise our price targets on slightly higher target multiples driven by positively evolving expectations for potential pricing power,” he said.