UPDATE: Bank Of America Upgrades Carnival On Improving Trends

In a note released Thursday morning, Bank of America analyst Nicholas Thomas upgraded shares of Carnival CCL from Neutral to Buy and raised the price objective from $42.90 to $45.50.

Thomas began by noting that the stock has fallen 15 percent year to date, shifting its value from 19x to 15x fiscal-year 2015 P/E. Additionally, he said the company's failure to produce positive net yield growth in the third quarter was "bad for sentiment." However, he remains confident that the fourth quarter of 2014 will represent an inflection point in yield.

As an additional positive, Thomas noted Carnival's new CEO says there is significant room for cost and revenue synergies from cross-brand operational efficiencies.

"We fundamentally believe this asset under more intense and improved stewardship has both the market position and scale to derive ROIC in excess of WACC and mush improved margins," Thomas said. "In 2008 (pre-crisis) margins were 18 percent vs. 10 percent currently and ROIC was 11 percent vs. five percent currently. It may take time, but we continue to believe Carnival Corporation can return to these levels in the medium term."