As previously reported, Credit Suisse analyst Tim Ramskill downgraded Carnival (CCL) to Neutral from Outperform, as he is worried that his estimate of absolute industry capacity growth in 2018-2021 is double that of the last five years. This capacity growth is a greater concern given demand risks, said Ramskill, who cited risk to the top 3 cruise markets - the Caribbean post Hurricane Irma, the Mediterranean post the Barcelona terror attacks and China with the Korea travel ban still in place. He cut his 2018 yield growth view to 1.5% from 3%, lowered his EPS estimate by 10% and dropped his price target on Carnival shares to $70 from $78. Other publicly traded cruise operators include Royal Caribbean (RCL) and Norwegian Cruise Line (NCLH).

Bearish flow noted in Carnival with 49,711 puts trading, or 1.5x expected. Most active are Apr-24 14 puts and Apr-24 13.5 puts, with total volume in those strikes near 17,400 contracts. The Put/Call Ratio is 1.75, while ATM IV is up over 1 point on the day. Earnings are expected on June 26th.