Analyst Richard Clarke of Bernstein maintained a Hold rating on Carnival (CCL – Research Report), retaining the price target of $26.00.
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Richard Clarke has given his Hold rating due to a combination of factors affecting Carnival’s financial outlook. While the company reported a strong performance in the first quarter with a notable increase in net yields and an EBITDA that surpassed expectations, there are concerns about the sustainability of this growth. The forward guidance indicates that while demand remains strong, the anticipated earnings per share (EPS) improvement is largely driven by refinancing rather than operational growth.
Moreover, the company faces challenges with rising costs and slightly reduced capacity, which are expected to offset the benefits of yield increases. The outlook for the upcoming quarters suggests performance below consensus expectations, particularly in the second quarter where net income is projected to fall short. These factors, combined with the view that Carnival may not be the most favorable investment in the cruise sector compared to its peers, underpin the Hold rating.
In another report released on March 14, Deutsche Bank also maintained a Hold rating on the stock with a $25.00 price target.