UPDATE: Credit Suisse Lowers PT on Carnival on Updated 2013 Guidance

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In a report published Tuesday, Credit Suisse analyst Joel Simkins reiterated a Neutral rating on Carnival CCL, but lowered the price target from $34.00 to $32.00.

In the report, Credis Suisse noted, “After the close, CCL announced updated guidance for 2013 with net revenue yields expected to be down 2-3% compared to the previous guidance of (0.5%) to 0.5%. CCL now expects full year 2013 EPS to be in the range of $1.45 to $1.65 compared to its previous range of $1.80 to $2.10 and 2Q13 EPS guidance unchanged at $0.04 to $0.08. We are lowering our 2013/2014/2015 EPS estimates to $1.62/$2.41/$3.04 (from $2.02/$2.85/$3.28) respectively. Consistent with our expectations following the 1Q call and investor day around the March Seatrade Convention, CCL warned of cancellations and increased costs. While management has tried to previously downplay the number of guests impacted by headlines, recent incidents have hurt pricing. Consistent with our channel checks, CCL noted that greater ticket discounting has led to higher booking volumes but lower than anticipated revenue yields. In our view, CCL may need to continue trimming price to fill its vessels. Following the company's weak 1Q earnings, we believed CCL's lowered guidance did not fully encompass the difficult European operating environment and costs associated with Triumph.”

Carnival closed on Monday at $35.32.

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Posted In: Analyst ColorPrice TargetAnalyst RatingsCredit SuisseJoel Simkins
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