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Carnival’s steep drop since since the start of the U.S.-Iran war has made the stock more attractive, according to Morgan Stanley. The bank upgraded the cruise line operator to overweight from equal-weight, while slightly cutting its price target to $31 from $33, implying a more than 28% gain from Wednesday’s close. Despite the upgrade, Morgan Stanley cut its net revenue yield forecast for Carnival, believing softer European demand will result from the war in the Middle East and its consequences on oil prices. But analyst Jamie Rollo noted that demand shocks have typically been a great time to buy the stock. Carnival is down 23% since the war began. This move is “similar to the declines it saw over the 2003 Iraqi War, the 2010 Arab Spring and 2022 Russia-Ukraine War, and worse than the 2023 Gaza and 2025 Iran conflicts,” he wrote in a Thursday note. “If we look at the 12 months following these ~30% drop-offs, we see rebounds of 40-120%. Of course, every event differs in magnitude, impact and duration, but directionally these figures give us some comfort.” CCL mountain 2026-02-27 CCL since Feb. 27 chart. Rollo added that he thinks Carnival and the broader cruise industry is in a stronger spot to manage a potential downturn than in the past. He pointed to cruising’s relative attractiveness compared to other vacations — with its simplicity and “safe haven” destinations of the Caribbean, Western and Northern Europe and Alaska — the ability to add value to its pricing, and Carnival’s strong free cash flow. Rollo said the stock has an attractive risk-reward ratio, though he warned its earnings report next Friday could be sour. “We are expecting a cautious outlook with a guidance cut from the higher oil price, but think this is well expected,” he wrote. Shares of Carnival were slightly positive in Thursday premarket trading.
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