P&O, Carnival Shares Begin Recovery
Shares in shipping operator Peninsular & Oriental Steam Navigation Co. moved to full speed ahead March 23, tracking a recovery course by U.S. cruise giant Carnival Corp., analysts said.P&O shares, which slid from $16.47 at the beginning of the year to touch a low of 586 pence on March 17, were among the strongest performers in the FTSE 100, up 48-1/2 pence or eight percent at 648p.. More than 3.2 million shares traded by this time.
P&O shares have underperformed the FTSE 100 index by as much as 38 percent on the year, but that pales to insignificance when placed alongside Carnival's share slump. The world's largest cruise operator is down 50 percent against the S&P 500 index on the year, having sunk to an 18-month low of $21-3/16 on March 17. The company set sail in 2000 valued at over $46.
But Carnival shares have rallied from the deep over the last three sessions to post an overnight close in New York of $24-3/16. P&O shares have charted a similar course.
"The real issue is the recovery by Carnival," said West LB sector specialist Andrew Murphy, who rates the stock a buy with a price target around 850 pence.
"There's been a lot of negative sentiment around the sector and there's a big case for arguing they are oversold," he said.