Canaccord Genuity Morning Coffee on Carnival (CCL): Watching the Carnival From A Different Seat
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Price: $14.79 --0%
Rating Summary:
22 Buy, 9 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 8 | New: 13
Rating Summary:
22 Buy, 9 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 8 | New: 13
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Canaccord Genuity Morning Coffee on Carnival (NYSE: CCL): Watching the Carnival from a different seat.
Canaccord analyst said, "Coverage of Carnival has been assumed by new a new analyst at Credit Suisse, who is maintaining the brokerage’s neutral stance on the world’s largest cruise vacation company. While Credit Suisse believes Carnival should benefit from its scale, and investment grade balance sheet and long-term global expansion opportunities, they remain neutral given the company’s exposure to volatile fuel costs and to Mideast markets, given increased tensions in the region (management estimates a potential $0.05 impact on 2011 EPS due to the Mideast). Bigger picture, a relative slowdown in new capacity and an improving global backdrop should be good for the cruise industry longer term, which could allow for improved earnings power. However, Credit Suisse favours Royal Caribbean Cruises (NYSE: RCL) on a relative basis given stronger earnings leverage. They estimate that for Carnival, every 1.0% in net yield adds 5.8% to 2011 EPS, compared to 7.3% for RCL. The brokerage believes rising energy and commodity prices could dampen consumer demand and place pressure on margins. Going forward, they see the company’s Q2 earnings, wave season trends, increased dividends, ramp of AIDA Sol (April), Carnival Magic (May) and Seabourn Quest (June) as potential catalysts for the stock."
Canaccord analyst said, "Coverage of Carnival has been assumed by new a new analyst at Credit Suisse, who is maintaining the brokerage’s neutral stance on the world’s largest cruise vacation company. While Credit Suisse believes Carnival should benefit from its scale, and investment grade balance sheet and long-term global expansion opportunities, they remain neutral given the company’s exposure to volatile fuel costs and to Mideast markets, given increased tensions in the region (management estimates a potential $0.05 impact on 2011 EPS due to the Mideast). Bigger picture, a relative slowdown in new capacity and an improving global backdrop should be good for the cruise industry longer term, which could allow for improved earnings power. However, Credit Suisse favours Royal Caribbean Cruises (NYSE: RCL) on a relative basis given stronger earnings leverage. They estimate that for Carnival, every 1.0% in net yield adds 5.8% to 2011 EPS, compared to 7.3% for RCL. The brokerage believes rising energy and commodity prices could dampen consumer demand and place pressure on margins. Going forward, they see the company’s Q2 earnings, wave season trends, increased dividends, ramp of AIDA Sol (April), Carnival Magic (May) and Seabourn Quest (June) as potential catalysts for the stock."
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