Carnival Corporation: Berenberg cuts to 'hold'.
(CercleFinance.com) - Berenberg cut this Monday its recommendation on Carnival Corporation from "buy" to "hold," reducing its target price from 5000 pence to 4000 pence.
While the broker remains positive about the outlook for the cruise industry going into 2017, Berenberg explains that recent trends in the cost of fuel, a further strengthening of the dollar and an increase in interest rates create headwinds that could be "tough to offset" for the passenger cruise line company.
The expert thinks that the solid yield growth expected in 2017 could be undermined by currencies, rising fuel prices and higher interest costs.
Berenberg also believes that the recent US interest rate hike will likely lead to a slight rise in the company's cost of debt.
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