Truist Securities raised Carnival’s share price target from $ 16 to $ 18
Cruise concern Carnival Corp (NYSE; CCL) prepares to return to sea after the House of Representatives passed bill allowing ships to travel between Washington and Alaska. The company announced yesterday that three of its brands, including Princess Cruises, Holland America Line and Carnival Cruise Line, will be back into service in July for a partial season in the northernmost state of the United States. This is the first crossing since the start of the Covid-19 pandemic. In response, the last time it was checked, security increased 1.3% to $ 27.88.
At least one broker is optimistic about the news. In particular, Truist Securities raised CCL’s target price from $ 16 this morning to $ 18. Analysts are still hesitant about Carnival stocks, with eight of the 14 reporting lukewarm “hold” or below rating, while six said “strong buy”. Additionally, the stock’s 12-month consensus target of $ 27.90 is in line with current levels, leaving plenty of room for further price hikes and / or upgrades in the future.
The carnival population has been exposed to some rough waters over the past year. Although stocks hit a year-long high of $ 30.62 on April 7, it’s still comparatively low as it was before the pandemic. Security has also been struggling with overhead printing at $ 29 for the past few weeks. In the longer term, however, CCL has a healthy 94.6% lead over the previous year.
Brief pressure could generate additional tailwind for equity. In fact, short rates are already down 6.1% in the most recent reporting period, although the 57.08 million short stocks sold still account for 10.8% of the stock’s available free float. In other words, further easing of pessimism among short sellers could propel Carnival stocks even higher.
This may be the perfect opportunity to weigh CCL’s next step with options. The Schaeffer’s Volatility Index (SVI) of 57% is above 10% of all other values of the past year. This means that option players are pricing in lower than usual volatility expectations.