Carnival Corporation (LON:CCL, NYSE:CCL) shares rose on Wednesday as German bank Berenberg upgraded its recommendation to ‘buy’ from ‘hold’ and left the price target unchanged at US$70.00
In a note to clients, analysts at Berenberg said they believe that the backdrop of strong consumer confidence continues to support the industry but they do not see any evidence that supports the sell-off in the shares.
READ: Carnival Corp cruises past Wall Street estimates but shares sink on guidance
The analysts do not believe that investors should have been ‘spooked out’ by guidance commentary, and although Caribbean prices have not yet recovered, the guidance for 2018 remains strong and early commentary on 2019 remains robust.
The analysts said: “We have looked at the guidance commentary issued by Carnival each year by quarter and conclude that, to date 2018 stacks up well on previous years with the exception of 2017, which is generally regarded as being the most successful year for the industry in the last decade: more than one cruise executive described it as a year unlikely to be repeated, but it does not justify current valuations.”
In lunchtime trading, Carnival’s shares rose 2.7% to 4,467.00p