Market Overview

Carnival Cruise Analyst Stays Bullish Amid 'Brexit Chaos'

Carnival Cruise Analyst Stays Bullish Amid 'Brexit Chaos'

Coming off a first-quarter earnings beat Tuesday, Carnival Corp (NYSE: CCL) shares still fell significantly after delivering disappointing second-quarter and FY19 guidance — but one analyst is staying the course on the company.

The Analyst 

Buckingham Research analyst Daniel McKenzie maintained a Buy rating on Carnival and lowered the price target from $68 to $65.

The Thesis

McKenzie said he was looked for an unchanged outlook given strong Caribbean travel demand, but said the source of his error was weaker-than-expected but says the source of his error is tied to weaker than expected European pricing due to "Brexit chaos."

“Our longer-term investment thesis has been tethered to a stronger-for-longer earnings cycle which remains intact, but near-term investors are frustrated with the operators' inability to claw back pricing to offset fuel and FX,” the analyst said in a Wednesday note. 

Although McKenzie said investors are calling into question Carnival’s ability to execute on earnings growth this year, he said earnings in 2019 are growing in the mid-single digits despite an uncertain macro backdrop — and the company expects to return to double-digit earnings growth.

Carnival Cruise shares are off their 52-week high by 24 percent and are unlikely to re-rate higher until the company can execute in the third quarter, McKenzie said: "hence our thesis is pushed out." 

Viking’s widely reported mechanical breakdown is likely not material to CCL, according to Buckingham. 

Price Action

Carnival Corp. shares were down 1.7 percent at $50.83 at the time of publication Wednesday. 

Related Links:

Norwegian Cruise Line's Stock Will Sail Higher, Morgan Stanley Says

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

Latest Ratings for CCL

Jul 2019MaintainsHold
Jul 2019DowngradesBuyHold
Jun 2019MaintainsHold

View More Analyst Ratings for CCL
View the Latest Analyst Ratings

Posted-In: Analyst Color Earnings News Guidance Price Target Reiteration Travel Analyst Ratings Best of Benzinga


Related Articles (CCL)

View Comments and Join the Discussion!

Latest Ratings

AVAWilliams CapitalDowngrades42.0
CDEVSunTrust Robinson HumphreyUpgrades8.0
AGCOBMO CapitalMaintains80.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
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

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Reports: May Will Step Down After Brexit Deal Is Reached

An Empty Rally? Shipping Stocks Make A Low Float Comeback