Ahead of second quarter results on Tuesday, Carnival has cruised to the top of the FTSE 100.
Its shares have added 135p or 4% to £33.03 as Deutsche Bank moved from hold to buy with a £35.25 price target. The bank said:
We expect Carnival’s second quarter earnings to be above the upper end of its guidance range and for the group to demonstrate further bookings and pricing recovery coupled with more operational momentum in its core Carnival brand. Overall in our view this update will not only underpin near term consensus forecasts, but should incrementally build confidence for outer years and the double-digit return on capital employed target. With over 10% target price upside, we upgrade to buy.
On the detail of the second quarter figures, Deutsche said:
We forecast second quarter earnings per share will improve to $0.17 from $0.14 in the second quarter of 2014 driven by (i) continued benefit from operating efficiencies, (ii) lower fuel costs (down 35% year on year). We are 6% higher than consensus.
Meanwhile with hopes of a Greek deal not yet dashed ahead of crucial Eurogroup and EU leaders meetings - as well as a spate of takeover speculation - the FTSE 100 is currently up 86.46 points at 6796.91.
