The Carnival Corporation (Carnival) NYSE common stock hit our target price on 15 July 2009, due to positive investor reaction to the company's healthy fundamentals and the emergence of macro level green shoots indicating a recovery in global economic conditions. However, at current levels, we feel the medium-to-long term upside potential for the stock has been exhausted and we downgrade the NYSE common stock rating from a BUY to a HOLD....

The recessionary pressure across the global economy has severely affected the leisure travel industry. Although Carnival reported a y-o-y increase in bookings this year, it had to resort to significant price discounting to stimulate this. In the North American region, it is currently resorting to discounts of 15- 20%, while in Alaska and Europe it is resorting to discounts close to 30% to 40%....

Carnival Corporation’s (Carnival) NYSE common stock achieved our target price on 09 April 2009. We believe this reflects investor confidence over the company’s better than expected 1Q 09 results and the company’s efficient cost control measures. However, due to the limited performance visibility for the leisure industry in the current economic environment, and following the increase in the NYSE common stock price, we believe the medium…