Market Overview

Goldman Sachs Upgrades Carnival, Says Line Is Cruising Toward Growth

Goldman Sachs Upgrades Carnival, Says Line Is Cruising Toward Growth

Carnival Corp. (NYSE: CCL) is cruising along and its stock should be floating higher, according to Goldman Sachs.

The Analyst

Goldman’s Stephen Grambling upgraded his rating on the cruise ship company’s stock from Neutral to Buy with a price target of $65.

The Thesis

Grambling expects Carnival to see net unit growth of around 5 percent over the next three years -– nearly double what it’s been the last three.

One big reason for the wave of optimism? Concerns about European demand slowing are overblown, Grambling said. Even if there’s a drop in European net yield, it would be a small impact on Carnival, he wrote in a note. The market is likely already factoring in the macroeconomics, he said, which helps make Carnival a value right now.

The cruise line is poised for growth because it has grown its fleet in recent years, Grambling said. Over the last few years, the company has gotten rid of older, smaller ships and replaced them with larger, more efficient ones, along with other investments in technology expected to create efficiency.

"With Carnival expecting to accelerate capacity, “we expect stronger top-line growth and corresponding operating cost leverage to support double-digit EPS growth in 2019/2020,” Grambling wrote.

Price Action

Carnival stock was up 1.8 percent Wednesday to $56.28 per share.

Related Links:

Carnival Cruises Into 2018 On A Wave Of Top-Line Growth; Analyst Sees More Upside

Barclays Upgrades Carnival, Says Cruise Lines Are Firm's 'Most Preferred Subsector'

Latest Ratings for CCL

Mar 2019Goldman SachsUpgradesNeutralBuy
Jan 2019Standpoint ResearchDowngradesBuyHold
Jan 2019MacquarieUpgradesNeutralOutperform

View More Analyst Ratings for CCL
View the Latest Analyst Ratings

Posted-In: Goldman Sachs Stephen GramblingAnalyst Color Upgrades Analyst Ratings Best of Benzinga


Related Articles (CCL)

View Comments and Join the Discussion!

Latest Ratings

DRIBank of AmericaReiterates130.0
PVACNorthland SecuritiesUpgrades0.0
NKEWells FargoMaintains80.0
DRIWells FargoMaintains120.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Trader Essentials
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Fast Growth For This Fintech ETF

Chelsea Handler Invests In Cannabis Content Company Civilized