Macquarie Analyst Paul Golding has revealed that Carnival Cruise Corp been upgraded N to OP.
Paul said Macquarie saw a positive catalyst horizon. Macquarie aggregated ~1,000 available sailings with departures before July for insights into each operator’s respective strategies and relative exposure.
On valuation, Macquarie saw most upside for NCLH followed by CCL and then RCL…With all three major US cruise lines reporting FY20 results, suspension extensions now in place for most through mid-spring, and with COVID cases dropping and vaccine penetration rising.
Paul thinks most negative catalysts are now in the rear-view mirror and think the next possible round of suspensions could be bookended by a firmer resumption announcement in the US.
Technical instructions from the CDC are also forthcoming and could drive more confidence. And while the risk of new variants could make a resumption choppy, vaccine modifications and lockdown fatigue could make these less impactful.
While shares have bounced quite a way off their 1 year lows, and barring recession or a sector rerating, paul says the catalysts should trend more positive from hereinto summer, which is coming together as a target for leisure broadly, but also in consumers’ eyes given incrementally stronger 2H booking commentary from RCL on pricing vs. 2019 incl.