To no one’s surprise, the cruise line industry has been pummeled by the coronavirus pandemic. From the viral outbreak on the liner Diamond Princess, to ongoing headlines along the lines of ’40,000 Cruise Ship Workers Trapped at Sea,’ to the heavy share price declines among the industry stocks, the news has been unrelentingly bad.
But nothing lasts forever, not even bad news, and what goes down must eventually come back up. Even cruise line stocks. The industry is down about 60% year-to-date, drastically underperforming the travel segment generally, but in recent weeks cruise line shares have surged 75%.
At the macro level, JPMorgan analyst Brandt Montour makes a case for both near-term risk and longer-term recovering among the cruise lines. The risks are obvious: the potential for coronavirus outbreaks on the ships, mitigated by the companies reopening at partial capacity. On the positive side, Montour credits “…the pent-up demand for vacationing seen broadly, the surprisingly high risk-tolerance of the average American, recapitalizations across the cruise space…, the relative resiliency of demand from repeat-cruisers, and of course the broader macro recovery.”
Getting into specifics, Montour has picked out two stocks that are worth the risk, and one that investors should avoid for now. Using TipRanks’ Stock Comparison tool, we lined up the three alongside each other to get the lowdown on what the near-term holds for these cruise line players.
We’ll start with Royal Caribbean, whose management Montour describes as “best in class.” The upshot is, that RCL shares are still available at a discount – and the company has several reasons for optimism going forward.
As Montour points out, RCL has a reputation for excellent physical infrastructure and operations – the company’s cruise ships and crews are generally considered industry leaders. With China opening up and loosening restrictions, RCL’s ticket prices have been holding up somewhat better than at peer companies. This is an important point; as the cruise lines are looking at reopening with limited capacity, maintaining ticket prices will be essential to maintaining margins.
All of this is not to say that the company is not feeling the pressure. Last month, RCL extended its suspension of sailings to the end of July, and the Q2 earnings forecast predicts a net loss of $4.43 per share – nearly triple the net loss reported in Q1. But these are likely balanced by the company’s strong liquidity position – it recently renegotiated more than $2.2 billion in debt – and its prospects for Q3 resumption of business in China.
Montour touches on the points in his comments on the stock: “Its relative liquidity position is no longer a concern, while its relative share outperformance and valuation is worth the step up in quality, in our view.”
Overall, Montour sees RCL as a stock worth the risks. He rates it a Buy, expecting the shares to outperform peers in the near future. His $72 price target implies an upside potential of 18% for the coming 12 months. (To watch Montour’s track record, click here)
The Wall Street view of RCL is still cautious. The stock’s recent rebound, despite underperforming the broader markets, has still pushed the share price well above the average price target – but even so, 9 out of 15 analysts rate the stock a Buy. With 4 Holds and 2 Sells, this makes the analyst consensus view a Moderate Buy. RCL shares are selling for $62.66; if it continues to appreciate, expect the analysts to adjust their targets upward. (See RCL stock analysis on TipRanks)
Norwegian Cruise Line Holdings (NCLH)
Next up is Norwegian Cruise Line, the third largest player in the cruise line industry, with a market cap exceeding $5 billion. Norwegian’s greatest advantage right now is the size and capacity of its cruise fleet. With a smaller fleet of relatively newer ships, and no new vessels scheduled to launch for the next two years, Montour sees the company as well-positioned to weather the coronavirus storm.
Montour also takes care to point out Norwegian’s relative discount – and high potential upside. In fact, even though he rates RCL as his best pick, he still sees NCLH as having the greater return potential.
Like RCL, Norwegian has suspended sailings through the end of July. While this will badly impact the bottom line, the company has also improved its liquidity position. Subsidiary company NCL announced last month the closing of two investments tranches, one for $400 million and one for $675 million.
Norwegian’s sound cash position and relative share price discount are the main attractors for Montour. He supports his Buy rating for the stock with a $24 price target that implies a healthy 20% one-year upside potential.
“We like NCLH's positioning with its relatively small, relatively newer fleet, with no new capacity coming on for the next ~2 years… NCLH’s relative discount and YTD share underperformance yield the most upside to our PT,” Montour concluded.
Again, Wall Street is more cautious here than JPM’s industry expert. The Moderate Buy analyst consensus rating is based on 15 reviews, including 8 Buys, 6 Holds, and 1 Sell. The average price target is only $16.67, while shares are selling for $19.99. (See NCLH stock analysis on TipRanks)
Last on the list is Carnival, the stock that Montour recommends avoiding – at least for now. It may strike you as unusual that the world’s largest cruise company (even after the coronavirus hit, Carnival boasts a $15.2 billion market cap.
But the company also has a heavy debt load. At the end of March, Carnival announced that it was making available $3 billion in senior secured notes to be due in 2023. In addition, the company also revealed plans to raise $1.75 billion through a sale of senior convertible notes, also due in 2023. In its simultaneous third debt announcement, Carnival also unveiled a public offering of $1.25 billion worth of common stock shares.
Along with the debt load, Carnival also suspended its 50-cent per share quarterly dividend, as a move to preserve liquidity. This is a serious blow to the stock, as the dividend, at current prices, would yield over 10%.
Montour comments on Carnival, saying, “CCL's growth metrics were sluggish heading into the crisis, as older capacity and regional footprints were more impacted... During COVID-19, CCL likely sustained the most direct brand damage…” The analyst also points out that Carnival lacks any ‘unique growth drivers,’ and that the company’s size makes it less nimble in dealing with the current crisis conditions.
With that in mind, Montour hedges on Carnival, giving the stock a Hold rating. His $20 price target suggests a modest 2% downside. (To watch Montour’s track record, click here)
JPM’s expert analysis is in line with the Wall Street aggregate view on Carnival. The Hold analyst consensus rating is based 15 reviews, including just 3 Buys, along with 8 Holds and 4 Sells. Shares are selling for $19.44, and the average price of $16.13 implies over 20% downside. (See Carnival stock-price forecast on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
The post J.P. Morgan: 2 Cruise Line Stocks to Bet on (And 1 to Avoid) appeared first on TipRanks Financial Blog.
In this specific predicament, U.S. officials have to choose a strategy to deliver the aid without the perception of benefiting Hamas, a group the U.S. and Israel both classify as a terrorist organization.
When aiding people in war zones, you can’t just send money, a development strategy called “cash transfers” that has become increasingly popular due to its efficiency. Sending money can boost the supply of locally produced goods and services and help people on the ground pay for what they need most. But injecting cash into an economy so completely cut off from the world would only stoke inflation.
So the aid must consist of goods that have to be brought into Gaza, and services provided by people working as part of an aid mission. Humanitarian aid can include food and water; health, sanitation and hygiene supplies and services; and tents and other materials for shelter and settlement.
Due to the closure of the border with Israel, aid can arrive in Gaza only via the Rafah crossing on the Egyptian border.
The U.S. Agency for International Development, or USAID, will likely turn to its longtime partner on the ground, the United Nations Relief and Works Agency, or UNRWA, to serve as supply depots and distribute goods. That agency, originally founded in 1949 as a temporary measure until a two-state solution could be found, serves in effect as a parallel yet unelected government for Palestinian refugees.
USAID will likely want to tap into UNRWA’s network of 284 schools – many of which are now transformed into humanitarian shelters housing two-thirds of the estimated 1 million people displaced by Israeli airstrikes – and 22 hospitals to expedite distribution.
Since Biden took office, total yearly U.S. assistance for the Palestinian territories has totaled around $150 million, restored from just $8 million in 2020 under the Trump administration. During the Obama administration, however, the U.S. was providing more aid to the territories than it is now, with $1 billion disbursed in the 2013 fiscal year.
The United Nations Relief and Works Agency is a U.N. organization. It’s not run by Hamas, unlike, for instance, the Gaza Ministry of Health. However, Hamas has frequently undermined UNRWA’s efforts and diverted international aid for military purposes.
Humanitarian aid professionals regularly have to contend with these trade-offs when deciding to what extent they can work with governments and local authorities that commit violent acts. They need to do so in exchange for the access required to help civilians under their control.
Similarly, Biden has had to make concessions to Israel while brokering for the freedom to send humanitarian aid to Gaza. For example, he has assured Israel that if any of the aid is diverted by Hamas, the operation will cease.
This promise may have been politically necessary. But if Biden already believes Hamas to be uncaring about civilian welfare, he may not expect the group to refrain from taking what they can.
Security best practices
What can be done to protect the security of humanitarian aid operations that take place in the midst of dangerous conflicts?
Under International Humanitarian Law, local authorities have the primary responsibility for ensuring the delivery of aid – even when they aren’t carrying out that task. To increase the chances that the local authorities will not attack them, aid groups can give “humanitarian notification” and voluntarily alert the local government as to where they will be operating.
Under the current agreement between the U.S., Israel and Egypt, the convoy will raise the U.N. flag. International inspectors will make sure no weapons are on board the vehicles before crossing over from Arish, Egypt, to Rafah, a city located on the Gaza Strip’s border with Egypt.
The aid convoy will likely cross without militarized security. This puts it at some danger of diversion once inside Gaza. But whether the aid convoy is attacked, seized or left alone, the Biden administration will have demonstrated its willingness to attempt a humanitarian relief operation. In this sense, a relatively small first convoy bearing water, medical supplies and food, among other items, serves as a test balloon for a sustained operation to follow soon after.
In that case, the presence of U.S. armed forces might provoke attacks on Gaza-bound aid convoys by Hamas and Islamic jihad fighters that otherwise would not have occurred. Combined with the mobilization of two U.S. Navy carrier groups in the eastern Mediterranean Sea, I’d be concerned that such a move might also stoke regional anger. It would undermine the Biden administration’s attempts to cool the situation.
On U.N.-approved missions, aid delivery may be secured by third-party peacekeepers – meaning, in this case, personnel who are neither Israeli nor Palestinian – with the U.N. Security Council’s blessing. In this case, tragically, it’s unlikely that such a resolution could conceivably pass such a vote, much less quickly enough to make a difference.
Topher L. McDougal does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
“The majority of wound infections often manifest themselves immediately postoperatively, so close followup should take place […]”
Credit: 2023 Barbarewicz et al.
“The majority of wound infections often manifest themselves immediately postoperatively, so close followup should take place […]”
BUFFALO, NY- October 20, 2023 – A new research perspective was published in Oncoscience (Volume 10) on October 4, 2023, entitled, “Diagnosis and management of postoperative wound infections in the head and neck region.”
In everyday clinical practice at a department for oral and maxillofacial surgery, a large number of surgical procedures in the head and neck region take place under both outpatient and inpatient conditions. The basis of every surgical intervention is the patient’s consent to the respective procedure. Particular attention is drawn to the general and operation-specific risks.
Particularly in the case of soft tissue procedures in the facial region, bleeding, secondary bleeding, scarring and infection of the surgical area are among the most common complications/risks, depending on the respective procedure. In their new perspective, researchers Filip Barbarewicz, Kai-Olaf Henkel and Florian Dudde from Army Hospital Hamburg in Germany discuss the diagnosis and management of postoperative infections in the head and neck region.
“In order to minimize the wound infections/surgical site infections, aseptic operating conditions with maximum sterility are required.”
Furthermore, depending on the extent of the surgical procedure and the patient‘s previous illnesses, peri- and/or postoperative antibiotics should be considered in order to avoid postoperative surgical site infection. Abscesses, cellulitis, phlegmone and (depending on the location of the procedure) empyema are among the most common postoperative infections in the respective surgical area. The main pathogens of these infections are staphylococci, although mixed (germ) patterns are also possible.
“Risk factors for the development of a postoperative surgical site infection include, in particular, increased age, smoking, multiple comorbidities and/or systemic diseases (e.g., diabetes mellitus type II) as well as congenital and/ or acquired immune deficiency [10, 11].”
Continue reading the paper: DOI:https://doi.org/10.18632/oncoscience.589
Correspondence to: Florian Dudde
Keywords: surgical site infection, head and neck surgery
Oncoscience is a peer-reviewed, open-access, traditional journal covering the rapidly growing field of cancer research, especially emergent topics not currently covered by other journals. This journal has a special mission: Freeing oncology from publication cost. It is free for the readers and the authors.
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G77 Nations, China, Push Back On U.S. "Loss And Damage" Climate Fund In Days Leading Up To UN Summit
As was the case in primary school with bringing in presents, make sure you bring enough for the rest of the class, otherwise people get ornery...
This age old rule looks like it could be rearing its head in the days leading up to the UN COP 28 climate summit, set to take place in the United Arab Emirates in about six weeks.
At the prior UN COP 27, which took place in Egypt last year, the U.S. pushed an idea for a new World Bank "loss and damage" climate slush fund to help poor countries with climate change. But the G77 nations plus China, including many developing countries, are pushing back on the idea, according to a new report from the Financial Times.
The goal was to arrange how the fund would operate and where the money would come from for the "particularly vulnerable" nations who would have access to it prior to the upcoming summit in UAE.
But as FT notes, Pedro Luis Pedroso Cuesta, the Cuban chair of the G77 plus China group, has said that talks about these details were instead "deadlocked" over issues of - you guessed it - where the money is going and the governance of the fund.
The U.S.'s proposal for the fund to be governed by the World Bank has been rejected by the G77 after "extensive" discussions, the report says. Cuesta has said that the nations seek to have the fund managed elsewhere, but that the U.S. wasn't open to such arrangements.
Cuesta said: “We have been confronted with an elephant in the room, and that elephant is the US. We have been faced with a very closed position that it is [the World Bank] or nothing.”
Christina Chan, a senior adviser to US climate envoy John Kerry, responded: “We have been working diligently at every turn to address concerns, problem-solve, and find landing zones.” She said the U.S. has been "clear and consistent" in their messaging on the need for the fund.
Cuesta contends that the World Bank, known for lending to less affluent nations, lacks a "climate culture" and often delays decision-making, hindering quick responses to climate emergencies like Pakistan's recent severe flooding.
The G77 coalition voiced concerns about the World Bank's legal framework potentially limiting the fund's ability to accept diverse funding sources like philanthropic donations or to access capital markets.
With just days left before the UN COP 28 summit, the World Bank insists that combating climate change is integral to its mission and vows to collaborate on structuring the fund.