Carnival Gets Price Target Cut On Weak Continental Europe Demand




Carnival plc (NYSE: CCL) received a price target cut on Monday due to lower net revenue yield guidance. The company reported earnings on June 20.

The Analyst

Bank of America analyst David Holmes reiterates a Neutral rating and lowered his price target to $53.

The Thesis

Holmes says the recipe of earnings growth is changing for Carnival. The company continues to target a double-digit earnings growth rate, but this growth is now more driven by capacity additions than net revenue yield growth.

"We think investors view this formula of growth as lower quality and therefore we believe the shares will likely continue to be dictated by net revenue yield momentum," Holmes wrote in a note.

Holmes said continental Europe continues to weigh on net revenue yield, where an elevated supply and a weak demand continue to persist. The analyst lowered his FY2019 estimates by 5.5% due to Carnival's lower net revenue yield guidance.

"We view valuation as supportive but we think valuation alone is not enough for shares to materially recover, we think an inflection in net revenue yield growth is required that does not appear forthcoming," Holmes said.

Price Action

Carnival shares traded down 1.24% to $46.03 at time of publication.

Related Links:

Norwegian Cruise Line's Stock Will Sail Higher, Morgan Stanley Says

Barclays Upgrades Carnival, Says Cruise Lines Are Firm's 'Most Preferred Subsector'

Latest Ratings for CCL

View More Analyst Ratings for CCL
View the Latest Analyst Ratings

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

COMMENTS

More Related News

These Factors Make Ring Energy, Inc. (NYSEMKT:REI) An Interesting Investment
These Factors Make Ring Energy, Inc. (NYSEMKT:REI) An Interesting Investment

Attractive stocks have exceptional fundamentals. In the case of Ring Energy, Inc. (NYSEMKT:REI), there's is a company...

Should You Be Happy With Gyldendal A/S
Should You Be Happy With Gyldendal A/S's (CPH:GYLD B) Performance Lately?

When Gyldendal A/S (CPSE:GYLD B) announced its most recent earnings (30 June 2019), I did two things: looked at its...

Here
Here's What Essity AB (publ)'s (STO:ESSITY B) P/E Is Telling Us

Today, we'll introduce the concept of the P/E ratio for those who are learning about investing. We'll look at Essity...

Is Chen Hsong Holdings Limited
Is Chen Hsong Holdings Limited's (HKG:57) High P/E Ratio A Problem For Investors?

The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). To keep it practical, we'll...

Don
Don't Sell Playa Hotels & Resorts N.V. (NASDAQ:PLYA) Before You Read This

This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.