JPMorgan Upgrades Carnival Shares to Overweight
Opportunity for Improved Brand Clarity and Pricing Power
Boss wrote, “CCL has an opportunity to drive improved brand clarity and pricing power with increased investment in advertising (vs. historical underinvestment vs peers) and given a smaller capacity growth profile, this provides a faster pathway for management to focus on de-levering the balance sheet.”
Carnival’s Business Strength More Balanced
Boss underscored Weinstein’s comments that Carnival is “no longer riding the coattails of a post-pause pent-up.” He added that CEO Josh Weinstein — who took over last year — emphasized during meetings with JPMorgan analysts that Carnival’s business strength is more balanced compared to its historical pre-pandemic trends.
New CEO and Leadership Changes Present a Promising Opportunity for Growth
The analyst thinks Carnival’s new CEO and leadership changes present a promising opportunity for growth. The company has engaged in other efforts for improvement he noted, such as retiring more than 20 ships over the pandemic and repositioning ship assets to more accretive brands.
Confidence in Current Trends
“On the top-line, we came away confident in current trends with all three management teams,” Boss said.
Shares Surge 62.4% Year to Date
Shares have surged 62.4% year to date and more than 30% over the past 12 months. The stock was up 3.5% Monday during premarket trading. — AsumeTech’s Michael Bloom contributed to this report.
