Carnival Corporation (CCL): Should You Invest?

Just when it seemed as if Carnival Corporation (NYSE:CCL) was starting to recover from a string of embarrassing and occasionally catastrophic sailings, the cruise ship operator is in hot water again.

A pair of Australian passengers reportedly fell overboard while on the Carnival Spirit last night as the ship sailed to Sydney. They have yet to be found.

Carnival Corporation (NYSE:CCL) stock can’t seem to catch a break these days. At a time when consumer-facing companies are hitting fresh highs, shares of the leading cruise ship operator are trading in the middle of its 52-week range.

Carnival Corporation (NYSE:CCL)’s competition is holding up considerably better.

Norwegian Cruise Line went public in January, hitting an all-time high earlier this week.

Royal Caribbean Cruises Ltd. (NYSE:RCL) is trading close to its January highs.

The Walt Disney Company (NYSE:DIS), the family entertainment giant that has expanded its fleet to four ships in recent years, logged a new all-time high after posting strong financial results this week.

Even Steiner Leisure Ltd (NASDAQ:STNR) — the spa operator with a presence on 156 ships — is trading within a masseuse’s striking distance of a new 52-week high.

A lack of growth is an issue for Carnival stock. Royal Caribbean and Steiner are expected to grow their revenue at a 5% clip this year, and RCL is coasting along at a projected 11% clip. Carnival is only projected to grow its top line by 3%.

Analysts have been scaling back their forecasts on Carnival Corporation (NYSE:CCL), fearing that negative sentiment after mishaps on several ships earlier this year are suppressing bookings for future sailings.

Three months ago, just before the Carnival Corporation (NYSE:CCL) Triumph was notoriously disabled in a sailing that stranded passengers for five days in occasionally deplorable conditions, Wall Street was targeting a profit of $2.42 a share out of Carnival this year. Now that estimate is all the way down to $1.97 a share.

The Walt Disney Company (NYSE:DIS) and NCL have seen their targets raised in that time, and the projection adjustments at Royal Caribbean Cruises Ltd. (NYSE:RCL) and Steiner Leisure Ltd (NASDAQ:STNR) have been only taken down marginally.

Bulls will argue that — for once — there is little that Carnival Corporation (NYSE:CCL) could’ve done to prevent this mishap. Passengers fall off cruise ships. This isn’t likely to be a servicing issue. However, it still makes the Carnival cruising experience look bad at a time when Carnival stock isn’t going along for the ride with its peers.

The article Carnival Stock: It Gets Worse originally appeared on Fool.com and is written by Rick Munarriz.

Longtime Fool contributor Rick Munarriz owns shares of Walt Disney (NYSE:DIS) and Steiner Leisure Limited. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney.

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