Report
Valens Research

CCL- Embedded Expectations Analysis - 2019 04 15

Carnival Corporation (CCL:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 16.0x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about their capacity, cumulative booked positions, and ability to service Chinese guests.

Specifically, management may lack confidence in their ability to generate yield and cost improvements, sustain capacity increases, and reduce fuel consumption. In addition, they may be concerned about changes to the components of their earnings model, onboard revenue seasonality, and uncertainty about Brexit. Moreover, they may be exaggerating their resilience to weather-related headwinds and the yield benefit of bookings in China. Also, they may be concerned about their cumulative booked position levels, heightened competition between Costa and MSC Cruises, and the activation of their Princess ships. Finally, they may be exaggerating the scope of their offerings, the appeal of Costa Venezia ship to Chinese guests, and the culinary and entertainment experience planned for their Carnival Sunrise ship.
Underlying
Carnival Corporation

Provider
Valens Research
Valens Research

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