The restart of services at Carnival (CCL) is moving at a slow pace but in the meantime the company has been making use of other opportunities arising from its business’s structural design.

To take advantage of the arbitrage between its two classes of shares, the company recently said it will issue new Carnival Corporation shares (U.S.) with the intention of solely using the proceeds to buy Carnival plc (U.K.) shares.

Throughout the pandemic the gap between the two shares has widened from what is usually a mid-single-digit percentage to roughly 14% at present and at times the gap has even increased to 20%.

Therefore, Berenberg’s Stuart Gordon thinks the move is a wise one.

“We believe that this will provide some support for the Carnival plc shares, as well as it also being the prudent decision by management to endeavour to narrow the arbitrage,” the analyst said.

Turning to the business itself, so far, Carnival has announced the restart dates for 42 ships, which are staggered until the end of the year, and account for roughly half of “total berths.”

“In our view,” Gordon added, “This reflects the significant logistical challenge faced by the industry in resuming services. This is due to a mix of both getting ships ready to sail, but also the short window available to sell cruise holidays.”

Although the analyst is in no doubt as to consumers’ strong desire to board cruise lines once again, Gordon considers the timeframe to sell the inventory “efficiently,” as way too short. As such, Gordon expects the pandemic to weigh on the company’s operational performance into next year.

And while the analyst upgrades Carnival plc’s rating to Hold (from Sell) after considering the risk of further downside to no longer be “within acceptable parameters,” the “continued uneasiness” regarding the operational outlook is reflected in Carnival Corporation’s rating remaining a Sell. The $20 price target remains too, suggesting shares will stay range-bound in the foreseeable future. (To watch Gordon’s track record, click here)

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On Wall Street, Carnival reviews remain a mixed bag; based on 5 Buys and 3 Holds and Sells, each, the analyst consensus rates this stock a Hold. On the other hand, the average price target is, somewhat confusingly, a bullish one; at $29.22, the figure suggests shares will be changing hands for ~40% premium a year from now. (See CCL stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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