Seatrade Cruise News is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Wells Fargo: CCL not worried about China economy or Caribbean

Wells Fargo: CCL not worried about China economy or Caribbean

Carnival Corp. is not worried about China's stock market fluctuations and slowing economy impacting the still small cruise sector, while the situation in Europe varies by country and the Caribbean is expected to continue doing well. These conclusions are from investor meetings with Carnival ceo Arnold Donald, hosted by Wells Fargo Securities in New York on Tuesday.

Though Arnold didn't provide any business update since the December earnings call, he indicated Carnival isn't worried about China's economy impacting the cruise industry now or long-term. That's because the economy there is still growing 5% to 6% annually, the cruise industry is expanding from a small base and there's strong Chinese government support for cruising.

Further port development is desired, and distribution and consumer awareness remain the priorities for developing the cruise sector.

According to Wells Fargo, Donald indicated Carnival sees the UK economy strengthening, stability in Germany, growth in Spain from a very depressed base and mixed trends in Italy.

Despite modestly higher capacity growth in the Caribbean, Carnivla feels confident about the region in 2016 and beyond, the brokerage said in a note. Marketing and deployment moves are driving demand and in future, ongoing marketing, collaboration among Carnival brands on deployment and Cuba's opening will be key.

Wells Fargo said Carnival believes there's support in the Obama administration and Congress to lift economic and travel restrictions but politics will likely keep this from happening until after the 2016 election. Plus, the Cuban government is expected to take a gradual approach on the number of US tourists allowed to enter.

Wells Fargo reiterated its 'outperform' (buy) rating on CCL and told investors 'fundamentals for the cruise industry remain constructive and valuations have become more attractive year to date.'

Carnival closed at $49.82 on Tuesday, up $1.02.

 

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish