Deutsche Bank Starts Carnival Corporation (CCL) at Hold
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Deutsche Bank initiated coverage on Carnival Corporation (NYSE: CCL) with a Hold rating and a price target of $48. Analyst Chris Woronka sees near-term headwinds.
"CCL has several positives going for it: highest in class dividend yield (2.9%), relatively low leverage (2.0x), a below-market (S&P 500) multiple (14.5x 2016E P/E), a meaningful share repurchase authorization in place, strong capitalization ($36bn), and a well-diversified, largest in class fleet. On those metrics, it screens well for a broad swath of global investors. That said, it also has a premium valuation vs. peers and--while outperforming the peer group YTD (-10.5% vs. -24.4% for the group overall)--it is underperforming the S&P 500 YTD (+6.2%), which potentially makes it a difficult stock to buy into yearend. With these offsets in mind, we initiate with a Hold rating and $48 PT," said the analyst.
Shares of Carnival Corporation closed at $48.78 yesterday.
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