Investors Missed The Boat In Selling Carnival, Stifel Believes

• Tuesday, Carnival Corp CCL declined 5.4 percent after reporting disappointing FY15 guidance.
• Stifel's Steven Wieczynski reiterated the firm's Buy rating and encouraged investors to "accumulate shares" on Tuesday's pullback.
• Wieczynski stated that investors' response to Carnival's revised guidance was "misguided" and that the "level of intense scrutiny investors are applying to the revision" is unnecessary.

• Tuesday, Carnival Corp CCL declined 5.4 percent after reporting disappointing FY15 guidance.
• Stifel's Steven Wieczynski reiterated the firm's Buy rating and encouraged investors to "accumulate shares" on Tuesday's pullback.
• Wieczynski stated that investors' response to Carnival's revised guidance was "misguided" and that the "level of intense scrutiny investors are applying to the revision" is unnecessary.

Following Tuesday's 5 percent sell-off, Stifel reiterated its Buy rating on Carnival Corp, while also raising its target price by $1 to $61. That represents roughly a 20 percent premium over Wednesday's early trade at $50.50.

Stifel's Wieczynski argued that investors fundamentally misunderstand Carnival's pricing strategy, which is moving towards a pricing scheme that offers lower prices up front and moves away from last-minute discounts. That will ultimately be better for Carnival's bottom line, Stifel said.

Carnival is leading in this new pricing strategy, though Stifel suggested that it will become "more widely adopted across the industry." As that happens, the industry will condition customers to not wait until the last minute for discounts. And judging by Carnival's strength in booking close-in trips, Wieczynski suggested that the strategy is the right one.

Even with Tuesday's sharp decline, Carnival is higher year-to-date, gaining 11.5 percent. At $50.50, the price is 7 percent below its 52-week high at $54.05; meanwhile the price is more than 50 percent above its 52-week low of $33.11.