Carnival share price falls to cap downbeat week

Mary Morley
  • February 5th, 15:56
  • Last Updated: October 21st, 14:42

Carnival’s (LON:CCL) shares have been trading in negative territory this week after sinking almost eight percent on Tuesday due to investors reading across from the disappointing results of rival Royal Caribbean Cruises and fears around the Zika virus affecting the business.

Analysts at Numis said the falls “look like a classic overreaction”, though it retained its ‘hold’ rating and target price of 3,600p on Carnival shares. The broker added that it guided Carnival to underlying net revenue yield growth of near two percent and an EPS rise of 20 percent.
Numis outlined three reasons for its stance: “there is a danger that the Zika virus leads to a short-term hiatus in bookings especially given the importance of the Caribbean (circa 30% of CCL capacity); the sector is still vulnerable to customer concern about terrorist attacks, and; despite the bullish noises coming out of the cruise companies the outlook in China/Asia remains uncertain.” Numis added that it acknowledged the rating was now “beginning to look attractive on current forecasts.”
Carnival’s share price plunged over eight percent on Tuesday. The sell-off has continued throughout the week and the cruise ship operator had lost a further 2.51 percent to 3,145.00p by 15:33 GMT today. The FTSE 100 also posted losses today although significantly more modest. By 15:44 GMT, the Footsie had trimmed 0.24 percent to stand at 5,884.37 points.
As of 15:57 GMT, Friday, 05 February, Carnival plc share price is 3,149.50p.

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