Morgan Stanley raises target price for Carnival

Morgan Stanley has raised its target price for Carnival, saying that the cruise operator's investment in marketing and distribution seems to be paying off.

The bank lifted its target for the shares from 3,100p to 3,300p, but kept an 'equal-weight' rating.

A survey of US cruise travel agents has shown a solid end to the 'wave' season in March, with reasonable booking volumes and prices, the US-based broker said.

"Cold weather, extended offers, more marketing, new ship launches and little negative media all seemed to have maintained the solid demand seen throughout Q1.

"While booking volumes were flattish, cruise operators are well sold, and pricing is also generally higher. Promotions continue, but seem less price-led than in the past, suggesting better pricing discipline," the bank said.

Meanwhile, most operators in the industry are benefiting from price increases as shown by recent web scraping data, it added.

The bank said this evidence supports Carnival's recent update in which it upgraded its yield guidance for the full-year.

Despite the positive comments, the stock was down 1% at 3,324p by close of trade on Wednesday.