Hurray for junk stocks! Shun Nakahara's "Recommended, I wonder" Part 4 updated July 22

　　　　　　　 　Carnival (CCL NYSE)

Target price: $20

<概要>

Carnival Corp. is a cruise line operator. In North America, Europe, Australia, and Asia, it operates cruises under the brands “Carnival Cruise Lines,” “Princess Cruises,” “Holland America Line,” “Seabourn,” “AIDA Cruises,” “Costa Cruises,” and “Cunard.” It also operates Alaska cruises in Alaska and Yukon, Canada. Headquarters: Miami, Florida.

<指標>

Market cap: $10,799,714 thousand (as of 7/20); Shares outstanding: 973,824,517 (as of 7/20)

P/E (trailing) ---x (20:04); P/B (trailing) 1.04x (20:04)

EPS (trailing) -8.46 (as of 2021/11); BPS (trailing) 10.69 (as of 2021/11)

<ニュース>

① Results: June 24

Revenue: $2.40 billion (consensus $2.79 billion); Adjusted EPS: -$1.61 (consensus -$1.14); Adjusted net loss: -$1.87 billion (consensus -$1.28 billion); Occupancy for the period: 69% (consensus 73.1%), all below expectations. Guidance: for Q3 (June–August), adjusted EPS expected to be negative but adjusted EBITDA positive; full-year 22/11 forecast still negative. However, operating cash flow turned positive, and liquidity of $7.5 billion (including cash, short-term investments, and borrowing facilities) is secured. Revenue compared to the prior year: +$0.49 billion; quarterly revenue surged 47.9% quarter-on-quarter. Customer deposits stood at $5.1 billion at end of May, up $1.4 billion from end-February. The company secured 91% of its operating capacity in bookings, signaling the worst period is over. CEO Donald: “We feel we can emerge from the very challenging, varied circumstances of the past few years. Operating cash flow has turned positive and is expected to rise further.”

Occupancy for the period 69%, a significant improvement from 54% in the previous quarter. Cruise capacity also up 25%. June occupancy around 80%. The cruise business has proven to be resilient during recessions in past cycles.

② Capital increase: July 21

A capital raise of up to $1 billion was reported to address 2023 debt maturities. One of the largest fundraisings to date. Offering range: $9.95–$10.50 per share. Price below today's close. Goldman Sachs serving as bookrunner. The financing caused the stock to fall after-hours.

<ギャン理論による株価分析・目標＞

Set of symbols: (● = 6.5-year cycle, ▲ = 25-month cycle, △ = 39-month cycle)

There are data since 1987, and it seems a 6.5-year cycle plus three of them forming a 20-year cycle are plausible. The 01–08 cycle appears to be the third phase of a long-term supercycle.

The sure thing is that the 6.5-year cycle has a margin of error of ±1.1 years, so focusing on that, two 6.5-year cycles completed from November 2008 to October 2014 to April 2020.

The issue is the second 6.5-year cycle which turned bearish completely. The bottom of the third 6.5-year cycle, likely ending around 2026–2027, could revert to the 1987 primogenitor level. Alternatively, there is a risk of collapse before then. The bottom of the second phase is extremely low.

As for the third 6.5-year cycle, it could form from two 39-month cycles (probability 1/3) or from three 25-month cycles (probability 2/3). The bottom timeframe from April 2020 to June 2022 spans 26 months, which aligns with a 25-month cycle bottom. While long-term cyclical downward pressure exists, there should be some rebound. The chart feels heavy, but the capital efficiency could be relatively high.

Targets: ① 16 ② 20 ③ 27.