UBS Cruise Line Sector Update: Forward Bookings Impact on CCL & RCL

UBS Cruise Line Sector Update: Concordia Update #3: Forward Bookings

UBS analyst, Robin M. Farley, said, "Forward Bookings Impact for Carnival (NYSE: CCL) and Royal Caribbean (NYSE: RCL): We believe this incident could lower CCL ‘12 constant FX yield to flat, from +1.9% before (allows room for -10% Costa yield decline & slightly weaker yields for CCL’s 9 other brands). We are reducing our ‘12 RCL constant currency net yield estimate for RCL by 50bp to +1.5% vs. our previous est of +2%. We believe both CCL and RCL will recover ’12 yield declines from negative booking impact related to Concordia by ’14, with the majority of the recovery coming in ’13."

"EPS Estimate Revisions for CCL and RCL: CCL: Reducing ‘12 and ’13 EPS to $2.03 & $2.67 from $2.55 and $3.05 on future bookings impact, stronger dollar and higher fuel pricing. RCL: Reducing ’12 and ’13 EPS to $2.43 and $2.93 from $2.72 and $3.14, also on bookings, FX and fuel."

UBS also cuts RCL's price target from $38 to $35 and CCL's from $31 to $30.

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