CCL - Embedded Expectations Analysis - 2018 10 25
Carnival Corporation (CCL:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 16.1x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about their Caribbean and Chinese markets, managing yield and mix, and meeting guidanceSpecifically, management may lack confidence in their ability to maintain low carbon emission levels, and to sustain strong ship sales in the secondary markets. Moreover, they may have concerns about their Homeport Advantage campaign, and may be exaggerating the success of Cunard's Transatlantic Fashion Week program. Furthermore, they may lack confidence in their ability to drive higher earnings and returns, and may be exaggerating the efficiency of their new ships. They may also lack confidence in the sustainability of strength in their Chinese market, and may have concerns about their ability to manage yield and mix, particularly in the Caribbean. Finally, they may lack confidence in their ability to maintain higher prices in all of their segments except for the Caribbean, and to meet their capacity growth targets
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