Financial Trading Blog
Stock of the day 16/12/2015 – Carnival PLC
After a super surge at the end of 2014 left Carnival at £29.30 at the start of the New Year the stock rose to £31.18 towards the end of January before falling back below the £30 mark for the majority of February. March was slightly rocky, yet the month ended triumphantly as Carnival jumped 7% following news that the company was lifting its full year outlook.
By the start of April Carnival was floating in all-time high territory, edging ever closer to the £34 level for the first time; however, the stock soon saw a sustained decline across the back end of that month, tumbling to £28.88 by the beginning of May. Things picked up once again around the UK election results, hovering around the £31 mark until June 22nd, when a vastly better than expected set of second quarter figures (with net income more than doubling) year-on-year to $222 million from $98 million) saw the stock begin to rise. Add onto this news in July that the company would be offering ‘cultural’ Cuba cruises in 2016 and Carnival managed to climb to a fresh high of £35.75 in the first few weeks of August.
(Source: IT-Finance.com 16/12/2015)
Rather unsurprisingly, Carnival couldn’t escape the well-worn tale of August’s Chinese chaos, and the stock soon fell away from its highs to briefly dip below £30 on Black Monday. Yet the company saw a pretty swift comeback, rising back to £35 in September after a set of better than anticipated third quarter figures.
October saw Carnival continue to rise, eventually hitting a year (and all-time) high of £36.36; however November saw the stock lose momentum as the company began its $1 billion share buyback program. This loss of momentum continued into December, leaving Carnival at a current trading price of £35.61 (IT-Finance.com, 16/12/2015).
In terms of the company’s fourth quarter report on Friday, analysts are expecting Carnival to post a 52% rise in earnings, but with a fall in revenue following the geopolitical incidents and global slowdown of the past few months.
Carnival PLC has a consensus rating of ‘Buy’ with an average target price of £36.20.
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