'However, visibility remains very murky on this timeline, which could translate into further downward pressure on our below-consensus 2021 projections,' analyst Sharon Zackfia said in a note.
Typically Carnival would be reporting Q4 results at around this time or in the next week.
New projection: $4.21 EPS loss in 2021
William Blair now forecasts a 2021 loss of $4.21 per share, compared to the consensus estimate of a $3.91 loss per share. Its revenue forecast is $7.7bn, compared to the consensus estimate of $8.4bn.
The brokerage estimates also reflect the impact of transactions completed after Carnival Corp.'s last earnings release. These include a $1bn at-the-market offering (67.1m shares at an average price of $14.78) completed Oct. 30 and a $1.5bn ATM offering (94.5m shares at an average price of $15.87) completed Nov. 13. Also taken into account are private offerings of $1.45bn of 7.625% senior unsecured notes and €500m of 7.625% senior unsecured notes, both due 2026, completed Nov. 25 and 10.4m shares at $17.59 per share through a registered direct offering that closed Nov. 23.
Sufficient cash for well over a year with zero revenue
Zackfia said that tollowing the last offering, Carnival had about $10.7bn in cash, sufficient to ensure survival well over a year in a zero-revenue environment.
'Carnival’s stock has increased nearly 50% over the past five weeks as investors anticipate the restart of global sailings in 2021. However, the necessity to raise capital to sustain operations has had a material impact on Carnival’s post-pandemic earnings power, which we estimate at roughly $2 assuming the revenue and operating margin achieved in 2019 — translating into less than half the $4.40 in adjusted EPS Carnival reported in 2019,' Zackfia said,
She added William Blair is encouraged by Carnival’s liquidity and cost containment efforts but reiterated a 'market perform' (hold) rating for the stock with a multiple of roughly 11 times post-pandemic earnings power.
CCL closed at $21.76 on Wednesday. Shares have traded in a range of $7.80 to $51.94 over the last 52 weeks.
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