Carnival upgraded to Buy from Hold at Jefferies

Jefferies analyst David Katz upgraded Carnival to Buy from Hold with a price target of $25, up from $9. The leadership change and the supply/demand recovery “drive a significant shift from debt to equity value” and should position the shares as more broadly investable, which could progress over several years, the analyst tells investors in a research note. Despite Carnival’s year-to-date rally, the “journey from a good trade to long-term investment case remains ahead,” says the firm. It notes Carnival expects to average $5B in cash from operations for the next three years, and should deploy on average $3B of adjusted free cash flow to pay down debt through 2026.