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23 Dec 2021 | 10:44

Berenberg maintains target price on Carnival

(Sharecast News) - Analysts at Berenberg reiterated their 16.0p target price on cruise line operator Carnival on Thursday, stating the group's recovery was "beyond the horizon". Berenberg stated its interpretation of Carnival's fourth business update was that bookings were softening, ships were returning to action more slowly than planned, and customer deposits had lagged and did not inspire confidence.

However, the German bank noted that Carnival continues to anticipate that the second half of 2022 will see things go "back to normal" and that 2023 underlying earnings will be higher than those seen in 2019.

"While there was little festive cheer in the update with the shares trading on undemanding multiples, based on a mix of our 2023 and 2024 estimates, we leave our price target unchanged and remain 'hold'-rated," said Berenberg.

The analysts also pointed out that Carnival had flagged that costs were set to be higher than expected in 2022, in line with their own thinking and the reason for them sitting below consensus on EBITDA in 2022 and 2023.

"While some of the costs for 2022 will be one-off in nature, the company flagged that 2023 will include four years of inflation and that despite the cost savings made and the improved efficiency of the fleet, this may not be offset."
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