Carnival shares drop after Deutsche Bank cuts stock to 'hold'

23rd Mar 2015 09:49

Carnival Corporation has had its rating cut to 'hold' from 'buy' over at Deutsche Bank on Monday, resulting in a 2% drop in the cruise company's share price.The stock was trading at 3133p in Morning trade.Deutsche Bank said while it expects the company's first-quarter trading update to demonstrate further bookings and pricing recovery coupled with more operational momentum in the core Carnival brand, "we think recent significant moves in euro and sterling currency could result in full-year 2015 earnings per share (EPS) guidance being reduced around 8%".The bank forecasts first-quarter 2015 EPS will come in at $0.07 versus $0.09 previous. "The key downside risks include, negative economic changes, rising capacity growth ahead of expectations and oil price increase shocks, while the key upside risks include, higher net yield growth, lower fuel costs and improving European economic growth," said Deutsche.However, it added that broadly, the bank remains positive on Carnival "as we think the medium term earnings recovery potential remains intact".Deutsche retained a 3,400p target price on the stock.