On Tuesday, Carnival PLC (LSE:CCL) was downgraded by Peel Hunt which argued that despite a record quarterly profit it was not expecting to see any more updates which could propel the stock forward until next year.
A day later, the cruise line company can feel a little bit more upbeat as analysts at Shore Capital have decided that the strong third quarter, along with a healthy pipeline of bookings pushing into the next, are enough to upgrade the stock.
Bearing in mind it is an upgrade in rating from ‘sell’ to ‘hold’ – actually meaning it is now rated at the same level as Peel Hunt’s ‘add’ recommendation - the London broker explained that it is confident in the group reaching its profit estimates on the back of stronger pricing.
Some areas the investment group still have concerns over include fuel costs, with expenditure estimates jumping by US$500 million over the last three months, something Shore Capital Group (LSE:SGR) sees as weakening full-year underlying earnings.
Another aspect of Carnival causing worry for investors is its debt pile, with net borrowings, excluding cash and leases, reducing to US$29 billion from US$31 billion last November but expected to rise back to US$30 billion by the end of the fourth quarter.
Shares in Carnival remained flat on Wednesday, having opened trading at around 920p.