2 Hard-Hit Stocks That Could Drop Even Lower

NYSE: CCL | Carnival Corporation  News, Ratings, and Charts

CCL – The stock market has been facing significant turmoil due to aggressive rate hikes and recession concerns. As the stock market is expected to remain volatile in the near term, the hard-hit stocks Carnival Corporation (CCL) and Upstart Holdings (UPST) might be best avoided as they might drop even lower. Read more…

The stock market started this week on a negative note, following last week’s sharp losses after Jerome Powell said that the U.S. economy would need tighter monetary policy “for some time,” raising concerns of an economic slowdown.

According to Reuters, Money market traders are pricing in a 72.5% chance of a 75 basis-point interest rate hike at the Fed’s September meeting. They expect the Fed funds rate to end the year at about 3.7%.

According to a Deloitte CFO Signals survey, 46% of surveyed CFOs expect the North American economy to be in a recession by the new year, while 39% expect a stagflationary period.

Amid this backdrop, it might be best to avoid the stocks Carnival Corporation & plc (CCL) and Upstart Holdings, Inc. (UPST). These stocks have been hit hard this year and might continue their downward trend.

Carnival Corporation & plc (CCL)

CCL operates as a leisure travel company. Its ships operate under the Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK), and Cunard brand names.

On August 17, CCL announced that Carnival Corporation, Carnival plc, and certain of their subsidiaries had entered into separate, privately negotiated exchange agreements pursuant to which the company was expected to exchange $339 million in aggregate principal amount of Existing Notes for $339 million in aggregate principal amount of new 5.75% Convertible Senior Notes due October 2024. On August 22, CCL announced the closing of the offering.

In the second fiscal quarter that ended May 31, CCL’s operating costs and expenses increased 132.7% year-over-year to $3.87 billion. Adjusted EBITDA came in at a negative $928 million. The company’s adjusted net loss amounted to $1.87 billion, and its loss per share amounted to $1.61.

Analysts expect CCL’s EPS estimate to be negative $0.16 for the fiscal third quarter ending August. Its consensus revenue estimate is expected to be $4.94 billion in the same year.

The stock has declined 59.1% year-to-date and 51.1% year-to-date to close its last trading session at $9.83.

This bleak outlook is reflected in CCL’s POWR Ratings. The stock has an overall D rating, which equates to a Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

CCL is graded an F in Stability and Sentiment and a D in Value and Quality. It is ranked #79 out of the 81 stocks in the F-rated Travel – Cruises industry.

In addition to the POWR Rating grades we’ve stated above, one can see CCL’s ratings for Growth and Momentum here.

Upstart Holdings, Inc. (UPST)

UPST operates as a cloud-based artificial intelligence (AI) lending platform in the United States. The platform aggregates consumer demand for loans and connects it to its network of the company’s AI-enabled bank partners.

For the second fiscal quarter ended June 30, UPST’s total operating expenses increased 65.1% year-over-year to $260.27 million. Adjusted EBITDA declined 90.7% from its prior-year quarter to $5.51 million. The company’s adjusted net income per share declined 98.4% year-over-year to $0.01.

Street expects UPST’s EPS to amount to $0.09 for the fiscal fourth ending December, indicating a decrease of 89.6% from the prior-year period. The consensus revenue estimate is expected to decline 38.3% from the prior-year period to $188.20 million for the same period.

The stock has declined 88.6% over the past year and 83.1% year-to-date to close its last trading session at $25.52.

The POWR Ratings reflect UPST’s bleak prospects. The stock has an overall D rating, equating to a Sell in our POWR Ratings system.

UPST has a Growth, Stability, and Sentiment grade of F and a Momentum grade of D. It is ranked #89 of 108 stocks in the F-rated Financial Services (Enterprise) industry.

Click here to see additional POWR Ratings for UPST (Value and Quality).

CCL shares were trading at $9.83 per share on Tuesday afternoon, down $0.00 (0.00%). Year-to-date, CCL has declined -51.14%, versus a -15.36% rise in the benchmark S&P 500 index during the same period.

About the Author: Kritika Sarmah

Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities. More...

More Resources for the Stocks in this Article

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UPSTGet RatingGet RatingGet Rating

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