The stock market started this week on a negative note, following last week’s steep losses after Jerome Powell said the US economy will need tighter monetary policy “for a while”, making fear of an economic slowdown.
According to Reuters, money market traders are pricing in a 72.5% chance of a 75 basis point rate. rising interest rates at the Fed’s September meeting. They expect the fed funds rate to end the year at around 3.7%.
According to a Deloitte CFO Signals survey, 46% of CFOs surveyed expect the North American economy to be in recession by the new year, while 39% expect a period of stagflation.
In this context, it might be best to avoid Carnival Corporation & plc stocks (CCA) and Upstart Holdings, Inc. (UPST). These stocks have been hit hard this year and may continue their downward trend.
Carnival Corporation & plc (CCA)
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 brands.
On August 17, CCL announced that Carnival Corporation, Carnival plc and certain of their subsidiaries had entered into separate privately negotiated swap agreements under which the company was to exchange $339 million in total principal amount of existing notes for $339 million in dollars in total. principal amount of the new 5.75% senior convertible bonds due October 2024. On August 22, CCL announced the closing of the offering.
During the fiscal second quarter that ended May 31, CCL’s operating costs and expenses increased 132.7% year-over-year to $3.87 billion. Adjusted EBITDA arrived at a negative amount of $928 million. The company’s adjusted net loss was $1.87 billion and its loss per share was $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 is down 59.1% year-to-date and 51.1% year-to-date to close its last trading session at $9.83.
These gloomy prospects are reflected in the CCA POWR Rankings. The stock has an overall D rating, which is equivalent to a sell in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
CCL is rated F in Stability and Sentiment and D in Value and Quality. It is ranked No. 79 out of 81 F-rated stocks Travel – Cruises industry.
In addition to the POWR ratings we have shown 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 loan demand and connects it to its network of company-enabled AI banking partners.
For the fiscal second quarter ended June 30, UPST’s total operating expenses increased 65.1% year over year to $260.27 million. Adjusted EBITDA decreased 90.7% from the prior year quarter to $5.51 million. The company’s adjusted net earnings per share fell 98.4% year over year to $0.01.
Street expects EPS for UPST to be $0.09 for the fourth fiscal year ending December, indicating an 89.6% decline from the prior year period. The consensus revenue estimate is expected to decrease 38.3% from the prior year period to $188.20 million for the same period.
The stock is down 88.6% over the past year and 83.1% year-to-date to close its last trading session at $25.52.
POWR ratings reflect UPST’s bleak outlook. The stock has an overall D rating, which is equivalent to a sell in our POWR rating system.
UPST has a Growth, Stability and Sentiment rating of F and a Momentum rating of D. It is ranked #89 out of 108 stocks in the F rating Financial Services (Corporate) 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, the CCL is down -51.14%, compared to a -15.36% rise in the benchmark S&P 500 over the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and her passion for writing made Kritika an analyst and financial journalist. She earned her Bachelor of Commerce degree and is currently pursuing the CFA program. With its fundamental approach, it aims to help investors identify untapped investment opportunities. After…