Why Carnival Stock Slumped Today
Just one week after Bloomberg issued a warning about the rising cost of debt and questioned Carnival's (NYSE: CCL) ability to meet its interest payments -- a note that sent the stock tumbling -- investment bank Morgan Stanley on Wednesday issued its own warning about Carnival's debt load.
Unsurprisingly, Carnival stock fell in response, and was trading down by 5.5% as of 2:13 p.m. ET.
In the note put out Wednesday morning, a Morgan Stanley analyst cited weak sales, growing economic risks, and the rising cost of interest on debt as the three biggest risks to Carnival -- and slashed their price target on the company's shares by 23.5%. The analyst further warned that investors can expect Carnival will require more cash to tide it over until conditions improve in the cruise industry, and said they should expect it will raise that cash by issuing more stock.
Source Fool.com
