Carnival stock pops as Stifel sees a buying opportunity, 100% potential upside

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By Senad Karaahmetovic

Stifel is an “absolute” buyer of Carnival (NYSE:CCL) shares heading into next week’s EPS release, analysts told the broker’s clients today.

Carnival stock trades about 0.5% higher in today’s trading session.

“This short-term trading call seems pretty simple to us (translation: we will probably be dead wrong)...Based on the recent trading weakness in CCL shares (mostly macro related but some whispers of demand slowing), we believe expectations are subdued, which we really like here,” the analysts told clients.

They reminded investors about the company’s tendency to offer “ultraconservative initial guidance.”

”We believe buyside expectations are actually pretty rational right now (~$4.2B for 2023E EBITDA), and while CCL’s initial EBITDA midpoint might be below that level, we believe their qualitative commentary will be strong enough to show investors there should be back-half loaded potential upside in 2H23,” the analysts further noted.

Overall, Stifel believes CCL’s commentary will be positive and sees a healthy setup into next week’s earnings report. The price target of $18 per share offers a nearly 100% upside relative to yesterday’s closing price.

Stifel’s comments come after CCL was named a short-term Buy idea at Deutsche Bank yesterday.

“We are adding CCL as a catalyst call Buy. The company reports F1Q23 results pre-market on Monday March 27 and we believe the report is likely to elicit a positive reaction from the stock, based primarily on weakening sentiment heading into the print, as well as what we believe to be a low bar for CCL’s outlook for the remainder of FY23,” analysts at Deutsche Bank said.