Broker snap: Calmer seas for Carnival

19th Jun 2009 13:02

Cruise operator Carnival's second quarter trading update yesterday has been generally well received by the investment analyst community, with Evolution, Numis and Charles Stanley all making positive noises.Charles Stanley said the second quarter figures were ahead of prior guidance and market consensus, despite being affected by weak pricing. "Significantly, however, management suggested that pricing had probably troughed, with some signs of recovery in recent weeks," the broker noted.Charles Stanley has lowered its 2009 earnings per share forecast by 6.8% to $2.05, putting in the middle of the range of earnings forecasts. Though it reckons the storm is easing for Carnival, it retains its "hold" recommendation. "Carnival remains the No.1 player in a global duopoly, has a strong balance sheet and is highly cash generative. We continue to believe that cruising is a structural growth industry. Near term visibility on yields and earnings, however, is poor. On balance, the valuation looks about right," Charles Stanley analyst Sam Hart concludes.Numis Securities was a little more optimistic, and has raised its price target for the stock from 1627p to 1748p.