• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

Markets Are Brutal for Restaurant, Cruise Line Names

Fear is the name of the game here, not reality, and until it abates, all bets are off.
By JONATHAN HELLER
Mar 06, 2020 | 10:00 AM EST
Stocks quotes in this article: RRGB, DIN, CAKE, EAT, BLMN, CBRL, CMG, MCD, PZZA, APRN, RCL, CCL, NCLH, WEN

The local restaurant where we ate last night for a birthday celebration was fairly well packed, and it's a very small space where tables are extremely close together. There was no hint of the virus fear that is gripping markets and certain areas of the country. Of course, this is eastern Pennsylvania, and there are no confirmed coronavirus cases in the state at this point.

However, yesterday, markets were brutal for restaurant names, especially for dine-in names. Damage was intense for Red Robin (RRGB) (-21%), Applebees and IHOP parent Dine Brands Global (DIN) (-13%), Cheesecake Factory (CAKE) (-12%), Brinker (EAT) (-10%), Bloomin' Brands (BLMN) (-8%), and Cracker Barrell (CBRL) (-7%).

Not surprisingly, fast food, and takeout related names such as Chipotle (CMG) (-5%), McDonald's (MCD) (-4%), Papa John's (PZZA) (-4%), and Wendy's (WEN) (-4%) fared better than their casual dining cousins. Meanwhile, home delivery name Blue Apron (APRN) , which has been in a downward slide, and does not appear to be viable for the long haul, rose 14%. I'd only ever imagined the company being saved via acquisition by an entity with much deeper pockets, and certainly not by a virus.

The slide in cruise line names continues: Royal Caribbean (RCL) (-16%), Carnival (CCL) (-14%), and Norwegian (-13%) (NCLH) all had awful days on Thursday, in reaction to news that a CCL Princess line ship was diverted to Mexico following the death of a passenger who had been on an earlier sailing.

RCL is now down more than 50% since January and yields 4.74%. It's similar for NCLH, which was a $60 stock in January, and closed Thursday at $29.59, while CCL's dividend yield has been pushed to a whopping 7.2%.

Current year earnings estimates have come down a bit over the past month; RCL's consensus for 2020 has fallen from $10.43 to $10.13, CCL's from $4.53 to $4.33, while NCLH has so far suffered the largest hit, with the consensus falling from $5.57 to $4.44, but further changes are likely for all three.

I am very intrigued by RCL, which trades at about 5.5x next year's consensus estimates (again, a potentially transient number), but will not pounce at this point. The virus itself is not the problem, it's consumer's fear of the virus that will dictate where things move from here. If regular cruise goers are convinced that being on a ship will increase their virus risks, if they stop booking, or cancel upcoming cruises, the "bottom" may be far from here.

Fear is the name of the game here, not reality, and until it abates, all bets are off.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Jonathan Heller had no position in the securities mentioned.

TAGS: Economy | Investing | Markets | Stocks | Trading | Restaurants | Consumer Discretionary | Coronavirus

More from Investing

What's the Next Move for Crude Oil?

Bruce Kamich
Jul 5, 2022 3:30 PM EDT

A temporary break in oil prices, along with lower interest rates, could be a near-term positive for equity prices.

Can Nvidia Rally and Help the Tech Sector Recover?

Bruce Kamich
Jul 5, 2022 3:00 PM EDT

Why Tuesday could mark the start of a turnaround.

As Oil Hits the Fan, I See a Trading Opportunity

Mark Sebastian
Jul 5, 2022 2:48 PM EDT

Let's look at how to play Devon right now.

Tesla's Charts Are Resisting a Downside Break

Bruce Kamich
Jul 5, 2022 1:54 PM EDT

Here's what aggressive traders could do.

We Can't Predict the Rest of 2022, but We Must Have a Game Plan

Brad Ginesin
Jul 5, 2022 1:30 PM EDT

Many are forecasting bad times ahead, but are they going to extremes? Here's my strategy for the the second half of the year.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:01 PM EDT PAUL PRICE

    A Recent Director Buy in Children's Place (PLCE)

    Four of the most recent insider trades in Children...
  • 07:34 AM EDT PAUL PRICE

    A $525,000 Vote of Confidence on Macerich (MAC)

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login