CCL surprisingly reported F2Q results this morning (6/20/19) and the guidance and commentary were disappointing. Our initial take is here. The stock was down 13% at one point before rallying some and closing down 8%.
Search Coverage List, Models & Reports
Search Results11-20 out of 301
CCL surprised everyone and reported earnings today instead of what was originally targeted for next week. The quarter wasn’t terrible, but the guidance was. CCL lowered FY constant currency net yield guidance by 100bp when the debate from investors was whether they would raise or not. CCL said they lowered the yield guidance primarily because of continued headwinds from the Continental European brands in 2H19. The stock seems likely to open down meaningfully again, after down 8% in each of the last four quarterly prints. We thought this could be the print where we start to see things change, but we were wrong. Fool me once, shame on you, fool me five times? Shame on us.
As our baseline assumption we expect a decent quarter; we assume CCL will reiterate prior FY constant net yield guidance despite a small headwind from the Cuba travel ban; and we assume CCL will narrow the prior EPS range. We also expect CCL to talk positively on demand, and perhaps note the potential to have raised yields without the Cuba headwind. We think this would be an ‘OK’ scenario for the stock. CCL’s stock has gone down an average of 8% in each of the last four prints, and we sense investors are hesitant to own going into this print as a result, but sentiment is poor, and the bar seems low to us.
In this week’s piece we discuss 1) our observations of investor sentiment and feedback following our regional gaming initiation, 2) our thoughts on insider selling activity in the cruise line space, 3) our thoughts on insider purchase activity at MGM, and 4) China total social financing for May, and the implications for Macau GGR. Please click the link above for the full report.
This was an eventful week for our coverage and for us as we were out meeting with investors most of the week. For this week’s piece we discuss 1) the Cuba travel ban, 2) more news flow on a potential CZR acquisition, 3) our VAC thesis with an interesting chart following our roadshow with management, and 4) our gauge of investor sentiment from our conversations. We’re also rebranding this weekly piece from our “Charts of the Week” to now “The Weekly Sho.”
On Tuesday evening (6/4/19) we lowered estimates for our best guess of the Cuba impact. Yesterday RCL quantified the impact and this morning NCLH quantified the impact. The RCL impact was slightly worse than we previously forecasted, and the NCLH impact was more extreme.
Tuesday morning (06/04/19) the Trump Administration announced the elimination of all non-family travel to Cuba after 6/4. Recall news first circulated in April of this possible restriction, but no official update had been provided until now, which we think provided hope that nothing would happen. Cuba accounts for a small percent of sailings at ~4% for NCLH, ~3% for RCL, and ~1% for CCL, but Cuba is a high yielding market with a double-digit premium that we think could be 25%+ when compared to Caribbean itineraries without Cuba. Therefore, there is a mix headwind from losing Cuba, and then to a lesser extent eliminating Cuba also adds more ex-Cuba Caribbean capacity.
Cruise line stocks de-rated in 2016 and have since traded at a larger-than-normal discount to the S&P 500. In this week’s piece we discuss our thoughts and five things we think it may take for the stocks to re-rate toward historical levels. Please click the link above for the full report.
WH trades at a discount to peers and we often hear some investors tell us the discount should close over time. Admittedly, the level of WH’s relative valuation seems more compelling to us – specifically versus CHH – as WH has underperformed CHH and its relative valuation to CHH has contracted further since WH’s spinoff last year. However, we continue to rate the stock Peer Perform because we believe there are reasons for a discount to peers – especially relative to MAR and HLT – and there are reasons why we don’t believe the valuation gap will meaningfully close in the near term. In this week’s piece we explore this idea by analyzing ten themes that factor into WH’s relative valuation. Please click the link above for the full report.
Each year around this time we dig through annual proxy statements to learn about changes in corporate governance and shareholder alignment, and we publish the results. Specifically, we study three broad categories: 1) CEO compensation, including how much and how it’s derived, 2) CEO equity ownership, and 3) board composition. We gave each company a qualitative score for each category and aggregated the results in Exhibit 1. Every company has areas of improvement, in our view, but HLT and WYND scored best based on our qualitative aggregation, followed by VAC, NCLH, and WH. All five are companies we think to be commercially aggressive and shareholder focused