Shares of Carnival Corp CCL spiked on Tuesday, after the company reported better-than-expected quarterly results.
Although forex and fuel are likely to be a headwind for fiscal 2023 performance, volumes and pricing are tracking strongly above the 2019 levels, according to Susquehanna.
The Carnival Analyst: Christopher Stathoulopoulos upgraded the rating for Carnival from Neutral to Positive, while raising the price target from $8 to $11.
The Carnival Thesis: The company’s earnings call on Monday suggested that the Wave Season has been “phenomenal,” Stathoulopoulos said in the upgrade note.
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“The strong 2023 Wave Season sets up a constructive, fundamental runway for FY23, with CCL’s revenue and marketing initiatives, fleet optimization plan, new perspective in the C-suite, and the value gap to land-based alternatives supporting a steady recovery for adjusted EBITDA into FY24,” the analyst wrote.
“While concerns around the banking sector certainly add to the risk of a slowdown, our base-case view assumes a low-single-digit five-year CAGR in passengers carried for FY23,” he added.
CCL Price Action: Shares of Carnival up 3.38% to $9.64 at the time of publication on Wednesday.
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