Cruise stocks on the move after Canada gives green light for tourism resumption

Cruise ships are about to return to the Canadian waters on November 1^st.

On Thursday, the country’s minister of transport, Omar Alghabra, said Canada will lift the COVID-19 related ban on cruises in November for operators that fully meet the public health requirements.

Canada lifted the ban sooner than expected

The announcement sent a wave of celebration in cruise stocks on Friday morning as the world’s second-largest country by total area had previously disclosed plans of keeping the ban in place until February 2022.   

Royal Caribbean (NYSE: RCL) and Norwegian Cruise Line (NYSE: NCLH) shares were up 2.0% each in premarket trading. Carnival Corp (NYSE: CCL) shares were up 1.0%. The three stocks are still down double digits so far this month.  

The risk of the rising delta variant

Truist Securities Patrick Scholes acknowledges the good news but pointed out that ‘it’s not without risks”. In his interview with CNBC’s “Squawk on the Street”, he said:

According to Scholes, it could take until 2023 or maybe later to get completely back to normal. Wedbush Securities’ James Hardman agreed during the same interview with CNBC that significant risks related to the rise of the new delta variant remain in place and can potentially weigh on the stocks in the future. Meanwhile, however, “every step in the direction of normality is good news,” he added.