Carnival Earnings, Bracing For Travel & Leisure Guidance (CCL, RCL)

Thursday we’ll see earnings out of Carnival Corp. (NYSE: CCL). The estimates from First Call are $0.29 EPS on $3.15 billion in revenues.  Next quarter estimates are $0.50 EPS on $3.32 billion in revenues. Estimates for fiscal Nov-2008 are $3.12 EPS on $14.69 billion in revenues.

Analysts have an average price target north of $52.00, more than $14.00 higher than Wednesday’s $37.60 close.  Carnival’s 52-week trading range is $36.10 to $52.10.

Estimates have come down on this one over the last 90 days, and considering that it’s a cruise ship owner and operator and the consumer pocketbook is getting thinner and thinner and thinner.  The short interest has also risen on this one to 14.79 million shares, which is almost 4-days to cover.  The cruise ship operator stock is also real close to 4-year lows.   So if this has any “not so bad numbers” and signals that the rivets aren’t popping off the earnings, then we’d be expecting a large move up on short covering mixed with bargain hunters.

We’d note that its performance in recent periods has been similar to that of Royal Caribbean (NYSE: RCL), its closest competitor.  We recently noted also that Goldman Sachs had raised their rating on Royal Caribbean to its Conviction Buy List.

Jon C. Ogg
March 19, 2008