Broker snap: Nomura slashes target for Carnival by 13%

14th Jun 2011 09:35

Nomura has pulled back its target price for cruise operator Carnival from 3,250p to 2,820p, after the company cut its fiscal-year (FY) earnings guidance ahead of its second quarter results next week.Carnival reported on Monday that compared with previous FY2011 earnings per share (EPS) guidance given in March of $2.55-2.65, there would be a $0.20 (8%) downgrade."This is the result of the latest mark to market for fuel and exchange rates ($0.05), alongside the impact of the Middle East and North Africa (MENA) situation as well as the Japan earthquake on bookings and itineraries ($0.15)," the Japanese broker said.As such, Nomura cuts its EPS forecasts for 2011 and 2012 by 10% and 12%, respectively, hence the reduction in target price. "While this is a downgrade, it is encouraging that the North American brands continue to trade well, and the majority of the weakness in Europe relates to disruption from MENA / Japan." A 'buy' rating is kept.---BC