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Carnival Corp.'s 2024 EBITDA could be well ahead of initial guidance - Stifel

Published 22/12/2023, 17:08
Updated 22/12/2023, 17:08
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The Carnival Corp. (NYSE:CCL) price target was raised to $25 from $22 by Stifel analysts in a note Friday. The analysts maintained a Buy rating on the stock.

The price target increase follows the cruise stock's latest earnings release, which saw it top consensus earnings and revenue estimates.

"Normally, when CCL provides initial full-year guidance, it usually disappoints the investment community and a selloff ensues," said the analysts. "Today, we got the exact opposite in terms of investor reaction. The difference this time around is while we still believe CCL's initial 2024 guidance is conservative, it's still above current consensus."

The analysts believe that shows 2024 "cruise demand/pricing is so strong right now" that even CCL can't mask how well next year should play out."

"Saying that another way is we believe CCL is still taking a somewhat conservative view around certain yield metrics (onboard spend, close-in pricing), and it would not surprise us if their 2024 yields end up being 10%+," added the analysts. "If we are right, 2024 EBITDA could end up being well ahead of CCL's initial guidance."

The analysts concluded that their firm feels investors are overlooking the significant free cash flow generation that will commence post-2024.

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