Carnival stock could be worth “$0” in the worst-case scenario: Morgan Stanley

Carnival Corp (NYSE: CCL) is down 15% on Wednesday after a Morgan Stanley analyst warned the stock could be worth “zero dollar” in case of a global recession.

Carnival Corp has over $30 billion in net debt

Jamie Rollo warns the cruise company could lose up to $900 million (EBITDA) this year. If true, fiscal 2022 would be the third consecutive year of Carnival losing money. Revealing his future outlook, he added:

Rollo warns that Carnival with continue to struggle with over $30 billion of net debt for the foreseeable future. His base case is for $7.0 a share that translates to another 20% downside from here.

Pete Najarian is also bearish on Carnival stock

Agreeing to the “sell” call on CNBC’s “Halftime Report”, Pete Najarian said the inflationary pressures continue to be a significant headwind for the cruise stocks.

Earlier this week, Carnival Corp reported its financial results for the second quarter that came in significantly below the Wall Street estimates. The stock is down more than 60% from its year-to-date high.