According to Stifel, the newest sale at Carnival Corp. created a chance before the cruise operator publicizes earnings on Monday. The cruise line operator’s shares are down 13.2% this month to shut on Thursday. “We are absolutely CCL share buyers heading towards next week’s EPS release and simultaneous disclosure of FY23 guidance,” analyst Steven Wieczynski said in a Tuesday note. “The expectations for the initial CCL guide are low at best, and we like this setup.” Stifel believes buyer side expectations for 2023 earnings before interest, taxes, depreciation and amortization (EBITDA) are within the $4.2 billion range, in comparison with Sellside analysts’ consensus of $4.3 billion . Investors understand that current consensus estimates are “barely dated,” he said. Based on Carnival’s history of providing very conservative initial guidance, Wieczynski projects the cruise line’s full-year EBITDA forecast to be $4.0-4.3 billion. However, he doesn’t think the guidance can be received negatively, given the already muted expectations of investors and the possibilities that management comments could suggest growth within the second half of the yr. “We imagine CCL and the industry as an entire are already well booked for this yr and while there could possibly be a spike in demand as a result of macroeconomic concerns, we do not think such a spike is anything significant given the strong, pent-up holiday/travel demand ” – he wrote. “We imagine CCL management will make a qualitative comment just like what was repeated of their last conversation, which indicates that demand, prices and onboard metrics remain well above 2019 levels.” CCL 5Y mountain Carnival – five-year results Carnival shares have been volatile because the start of the Covid pandemic that shut down the cruise industry. Carnival didn’t sail from the US for over a yr, and when it resumed in July 2021, it followed strict safety protocols. The stock has lost around 7% in 2021 after falling nearly 60% in 2022. The stock is up 14.4% this yr. Wieczyński admits that there may be room for error in his announcement. “This short-term trade call seems pretty straightforward to us (translation: we’ll probably be unsuitable),” he said. But in the long run, he also sees Carnival as a buy, based on the resilience of underlying consumer demand to the offerings of the worldwide cruise industry. “Based on the changes forced by the COVID-related financial challenges, we expect CCL to change into a leaner and more efficient entity, which should enhance the organization’s ability to generate sustained EPS and FCF growth over the approaching years,” he said. Its price goal of $18 is up 95% from Thursday’s close. – Michael Bloom of CNBC provided the reports.
Buy Carnival before earnings next week, in response to Stifel
