UPDATE: Morgan Stanley Downgrades Carnival Corporation to Underweight, Reiterates $32 PT on Negative Outlook

In a report published Wednesday, Morgan Stanley analyst Jamie Rollo downgraded the rating on

from Equal-Weight to Underweight, but reiterated the $32.00 price target. In the report, Morgan Stanley noted, “We cut EPS 28% in F14 and 16% in F15 and move to Underweight given the high valuation (F14e / 15e P/E 22-23x / 17-18x, FCF yield 1% / 4%). CCL's early F14 guidance implies a sluggish yield recovery and a step-up in costs, and we think consensus will drift to our level. A major restructuring and/or cash return look unlikely as supports to the stock.” Carnival Corporation closed on Tuesday at $34.54.