Goldman Sachs Downgrades Carnival Corporation (CCL) to Neutral

Goldman Sachs downgraded Carnival Corporation (NYSE: CCL) from Buy to Neutral with a price target of $43. Analyst Steven Kent noted a potential 'stealth' supply surge and a delayed turnaround. He also pointed out the stock hit his price target.

"Reasons for our downgrade: (1) Staying disciplined. CCL hit our price target, and it is time to move on. (2) The “no supply” environment is no longer true. Over 40,000 new berths will be added over a two year period in an already saturated market with little pricing power, with new aggressive strategies from MSC and NCLH in particular. (3) CCL’s turnaround has been too slow, in our view. When CCL appointed a new CEO, we expected to see more activity, but so far changes seem elusive. For example, management cited it could reduce airline expenses in 1Q14 results but nothing has materialized yet. (4) Management has not been as clear on financial and operational goals as we expected. In contrast, NCLH and RCL have laid out long-term return expectations," said Kent.

For an analyst ratings summary and ratings history on Carnival Corporation click here. For more ratings news on Carnival Corporation click here.

Shares of Carnival Corporation closed at $44.16 yesterday.

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