Matthew Boss, an analyst from J.P. Morgan, has initiated a new Buy rating on Carnival (CCL).
Matthew Boss has given his Buy rating due to a combination of factors that indicate a strong potential for Carnival’s future performance. Firstly, the demand for cruises remains robust, with no signs of weakening in key regions such as Europe and Alaska. The company has entered the year with a strong booking position, significantly above historical levels, which positions it well for the upcoming seasons. Additionally, Carnival’s management has been focusing on optimizing revenue by returning to historical occupancy levels and reducing promotional activities.
Furthermore, Carnival has strategically invested in yield management tools and increased advertising efforts to drive demand, despite its modest capacity growth compared to peers. This strategic focus is expected to enhance brand clarity and pricing power. The potential ceasefire between Russia and Ukraine could also benefit the cruise industry, adding to the positive outlook. With these factors in mind, Boss sees a favorable risk/reward setup for Carnival, with a price target that reflects a conservative valuation based on historical performance metrics.