Time to Short Cruise Companies Carnival and Royal Caribbean

Fuel costs out-of-control, strapped U.S. consumers, so time to take an all expense paid cruise?  Que Whitney - Ah, Hell to the No. ABN downgraded Carnival Corp. (NYSE: CCL) and Royal Caribbean Cruises (NYSE: RCL) for good reasons.

ABN today put the smack down on Carnival Corp. (NYSE: CCL) to Hold from Buy and Royal Caribbean Cruises (NYSE: RCL) to Sell from Buy as they believe the slowing economy will drive slower demand over the next 12 months.

Reviewing the charts:

How about the Short Float?

RCL:

But CCL:

Here's what the analyst said:

ABN Amro took a hatchet to its European travel and leisure sector ratings, cutting sector EPS for 2009/2010 by 16%, bringing it 15% below consensus estimates. "We find it hard to believe that demand (volume or price) from the business and/or leisure consumer will not reduce over the next 12 months; western GDP trends are slowing, business activity is softening, the credit cycle has turned, and consumer balance sheets are in many cases over-leveraged, particularly in the U.K. We, therefore, believe that a period of slower demand is likely."

Face it Masters, for lack of a better term, the ship is sinking.

Discliamer: No positions in the securities mentioned.