Keith bought CCL in the Hedgeye Virtual Portfolio at $32.82. According to his model, there is TRADE and TREND support at $32.51 and $32.19 respectively.
Carnival came out yesterday with a guarded outlook on 2012 which led to a barrage of analysts lowering estimates and price targets on the stock. However, we believe Carnival was over-conservative in its 2012 yield forecast as outperformance from the Caribbean and Mexico should support yields in the near-term. Our most recent Cruisers Price Matrix showed that for Q1 2012, improvements in Caribbean pricing is sustainable and robust pricing in Mexico could drive better than expected results, even in the face of difficult YoY comps. Continued weak pricing from Southern Europe is well-known but comps ease starting mid-February and any meaningful improvement either in occupancy or pricing during Wave Season would be a positive surprise. Carnival would also be well-positioned with lower fuel prices ahead, as forecasted by our Hedgeye Macro team.
