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08 Apr 2021 | 10:11

Peel Hunt ups Carnival price target, reiterates 'buy' after Q1 update

(Sharecast News) - Peel Hunt hiked its price target on Carnival on Thursday to 2,100p from 1,850p following the cruise operator's first-quarter update a day earlier. The broker said Carnival's statement and call were "more positive than expected" regarding forward bookings and pricing.

"Additional evidence of pent-up demand increases our confidence in a bounce-back in trading next year, with potential for an upside surprise from higher pricing," it said.

"With the UK-listed shares still at an irrational discount to the US-listed we reiterate our 'buy' recommendation and increase our multiple-based target price."

In its update on Wednesday, Carnival - which operates the AIDA, Princess and Costa cruises - posted a widening of its net loss in the first quarter due to the pandemic, but said volumes for all future cruises were around 90% higher than in the final quarter of last year, thanks in part to pent-up demand.

Cumulative advanced bookings for 2022 are ahead of a "very strong" 2019, despite minimal advertising or marketing, it added.

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