Carnival Corp CCL was featured as the call of the day Wednesday on CNBC's "Fast Money Halftime Report."
What Happened: Morgan Stanley analyst Jamie Rollo maintained Carnival with an Underweight rating and slashed the price target to a Street-low $7 from $13 after trimming estimates for the year.
The analyst cited weaker occupancies and pricing, as well as elevated costs. Rollo also introduced a bear case price target of $0.
Najarian's Take: Market Rebellion co-founder Pete Najarian agreed with the analyst call and warned that choppy waters are ahead.
"They've had to deal with so many different things over the last two years that they've been put into a really tight box and it's very, very difficult to get out of it," Najarian said.
The walls of said box continue to close in on the cruise line company. Najarian cautioned investors about consumer demand moving forward.
"Are people really willing to go back? Do they have the discretionary money to go out on these cruise ships? No is the answer most likely," he said.
Najarian noted that Carnival's debt accumulation has led to increased short interest in the name, which has sparked increased options activity. Some traders are betting on a quick pop, and they might get it, he added.
"But unfortunately for most, it continues to go down, down, down," Najarian said.
And it's not just Carnival. Najarian told CNBC that Royal Caribbean Cruises Ltd RCL and Norwegian Cruise Line Holdings Ltd NCLH are also plagued by debt.
"Take your pick," he said. "All three of them are ... pretty much in a rough spot right now given how much debt they really do have on the balance sheet."
CCL Price Action: Carnival has a 52-week high of $27.53 and a 52-week low of $8.66.
The stock was down 14.9% at $8.80 at time of publication.
Photo: courtesy of Carnival.
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