CCL - Embedded Expectations Analysis - 2019 02 06
Carnival Corporation (CCL:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 16.4x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about customer experiences, capacity growth, cost pressures, and their cash positionSpecifically, management may be exaggerating their ability to improve customer experience with technology enhancements, and may have concerns about their ability to increase revenues and reduce COGS. Additionally, they may be concerned about the effectiveness of celebrity marketing efforts and TV programming, and may be overstating their scale advantages. Moreover, they may be exaggerating the cost benefits of newer fleets and may lack confidence in their ability to increase capacity, particularly in Europe. They may also be concerned about their ability to offset fuel price cost pressures and achieve EPS guidance. Finally, they may lack confidence in their ability to fund debt service requirements with cash from operations, and may have concerns about their ability to access credit financing
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