Carnival Corporation (CCL) - Bear of the Day
Posted: 4/3/2012 1:00:00 AM
Referenced Stocks: CCL
Following the recent sinking of Carnival Corp.'s ( CCL ) cruise ship, we are cautious about the sector in the near term. This disaster shook customer confidence, thereby sharply reducing the booking volume and consequent earnings guidance.
Moreover, a slowdown in the European economy and faltering consumer confidence in Europe are currently acting as major hindrances to the company's growth. Surging fuel prices and a greater exposure to a sluggish European market remain other headwinds for the company.
Hence, we downgrade the stock from Neutral to Underperform. Our six-month target price of $29.00 equates to about 18.1x our estimate for 2012. The target price implies an expected negative return of 7.9% over that period.
CARNIVAL CORP ( CCL ): Free Stock Analysis Report
To read this article on Zacks.com click here.