Carnival Corporation’s (CCL) first quarter 2011 earnings matched the Zacks Consensus Estimate. However, surging fuel prices are acting as the major hindrance to the company’s growth. Moreover, greater exposure to a sluggish European market, overall inflationary outlook, political disturbances in some geographies and lower near-term Caribbean pricing will be headwinds for the company.
The company also reduced its net revenue yield guidance for fiscal 2011. Thus, we downgrade the stock from Neutral to Underperform.
Our six-month target price of $35.00 equates to about 13.4x our estimate for 2011. The target price implies an expected negative total return of 6.7% over that period.
CARNIVAL CORP (CCL): Free Stock Analysis Report
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