The brokerage sees the primary impact from extended/shortened or canceled itineraries because ships were unable to return to ports during the storm.
Minimal damage to private islands
Wells Fargo said private islands appear to have come through Dorian with beach erosion and cosmetic damage but minimal or no structural damage.
As for Freeport itself, ‘We believe re-routing of itineraries to other ports or extending stops at cruise line private islands will minimize the disruption while Freeport (and Grand Bahama Island) undergo extensive repairs,’ Wells Fargo analyst Tim Conder said in a note.
Grand Bahama Shipyard
‘Once the extent of damage/recovery time for the Grand Bahama Shipyard is identified, then repair costs along with updated industry drydock schedules can be determined,’ Conder added.
CCL and RCL each hold a 40% stake in the yard.
Excluding the potential impacts of Dorian, Wells Fargo fine-tuned its net yield and expense assumptions plus changes in fuel and foreign exchange costs to revise its EPS estimates for the cruise companies.
New estimates, excluding Dorian impact
The brokerage’s estimates for Carnival in 2019/2020 go to $4.39/$4.62 (from $4.39/$4.67), with a price target of $59 (unchanged). For NCLH, they are $5.14/$5.80 (prior $5.20/$5.78), and a price target of $70 (unchanged). For Royal Caribbean: $9.63/$10.72 (prior $9.65/$10.79), with a price target of $158 (from $155).
Wells Fargo rates CCL, NCLH and RCL 'outperform' (buy).
On Friday, CCL opened at $45.11, NCLH at $52.39 and RCL at $107.53.