Barclays Upgrades Carnival, Says Cruise Lines Are Firm's 'Most Preferred Subsector'

Strong fundamentals in the overall cruise sector and a competitive position in the Caribbean leave Carnival Corp CCL positioned for high upside potential, according to Barclays.

The Analyst

Analyst Felicia Hendrix upgraded Carnival from Equal Weight to Overweight and reiterated a $77 price target, implying 16-percent upside.

The Thesis

Hendrix added Carnival to Barclays' growing list of Overweight-rated cruise stocks in a Friday note.

“The cruise sector continues to be our most preferred subsector in our entire coverage universe (gaming/lodging/leisure),” Hendrix siad. 

Advanced cruise bookings for 2018 are ahead of 2017 numbers, and prices are trending higher, the analyst said. 

Carnival holds competitive price and occupancy positions in the Western Caribbean, where the cruise market is strong, Hendrix said. While hurricane-related fears exist for the Eastern Carribean, including Puerto Rico, they are subsiding and could present a buying opportunity for the stock, she said. 

Price Action

Carnival shares were trading down 1.63 percent at $65.11 at the time of publication Friday afternoon. 

Related Links: 

Benzinga's Top Upgrades, Downgrades For March 23, 2018

Strong Demand Makes 2018 An Encouraging Year For Norwegian Cruise Line, Analyst Says 

Photo courtesy of Carnival.