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From what I see interest rates look to stay higher for longer than previous estimates, which hits someone like CCL, this doesn't correlate with yesterday's news in USA inflation is coming down quicker than forecast. Still believe the general direction is up for the share
I think you do also need to look past the headlines and to the details… I’m still thinking this is cheap…
The company expects an annual loss between 28 cents per share and 44 cents per share, compared with estimates of a loss of 8 cents.
One final comment - todays market value seems fair. If someone wanted to buyout carnival today, they would be paying the same sort of price as pre - Covid and this shows how the moment has swung to an upside.
Before covid you’d pay £30b, after covid £10b and take on £20b debt.
I may have over simplified and missed some key points so please do enlighted
Today:
1301 million shares in circulation at £8 a share giving current market cap at £10.4b
Pre Covid using a £40 valuation:
692 million shares in circulation at £40 a share giving a market cap at £27b
Today if valued at £25:
Market cap >£27b. It seems very unrealistic given the business took on £20b of debt.
In my view they will survive, but how will they be able to invest in new ships and aggressive growth strategy that drives a higher valuation for the potential future? I’m not convinced. I believe £15 is a better target.
If you think this will be a straight line to £9+ then think again. There will always be daily changes, crude up 2%, traders sentiment today being risk adverse going into weekend. Who knows, go with your gut and long term I agree we should see upside
It’s two fold. Carnival is demonstrating it can service its debt without having to sell off parts of the business. This reassures any doubters that no, Carnival is not going under. But also and more importantly, when market conditions improve, Carnival has the capacity and steam to return to pre-Covid profits which in turns services the debt. The alternatives such as selling a brand to a competitor would have raised cash but reduced capacity and future revenues potential.
This update does not change Carnivals outlook, instead it reassures any doubt in the market. Onwards and upwards
Agreed, the SP does exactly the opposite of what EC says…
I got caught out by the poor results, I topped up to average £6.66. I’m leaving this for some time now - this business will recover, may just take a year to get there