Morgan Stanley analyst Jamie Rollo reduced his FY19 EPS forecasts for Carnival following the company's preannouncement and continues to see downside risk to yields given that Europe's demand environment seems to be getting worse and European supply growth remains elevated. He also believes Carnival's signal that European pricing is being hurt by too much capacity raises the risk of a similar dynamic in the U.S., where capacity growth is also high. The analyst, who thinks the company's dividend could be at risk given its high capex commitments and desire to maintain a strong credit rating, lowered his price target on Carnival Corp. shares to $48 from $54 and keeps an Equal Weight rating on the stock.