Zacks Analyst Blog Highlights: J.P. Morgan, Goldman Sachs, Citibank, Royal Caribbean and Carnival Corporation.

Business Wire, June 10, 2009

http://www.profits.zacks.com/

CHICAGO -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: J.P. Morgan (NYSE: JPM), Goldman Sachs (NYSE: GS), Citibank (NYSE: C), Royal Caribbean (NYSE: RCL) and Carnival Corporation (NYSE: CCL).

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Here are highlights from Tuesday’s Analyst Blog:

A Stress-Test Do-Over?

The good thing is that, with the exception of the unemployment rate, things have not been worse than the more adverse scenario, and the banks have been able to raise the capital needed to withstand that scenario. The release of the original stress test results focused almost exclusively on the more-adverse scenario. Thus, provided the economy does not turn out to be "more adverse than the more adverse," none of the "too big to fail" 19 is likely to actually fail.

That, however, does not provide much of a margin of safety. It is sort of ironic that the chief overseer of the program is coming out with this call on the very day that 10 of the 19 have gotten approval to withdraw from the program. On the other hand, the stress test did provide pretty clear delineation between the strong banks like J.P. Morgan (NYSE: JPM) and Goldman Sachs (NYSE: GS), which are at the front of the line to get out from under the TARP, and the weaker institutions like Citibank (NYSE: C) and GMAC (a.k.a. Ally Bank), which are a long ways away from being free of the need for government help.

Royal Caribbean’s Flu Impact

Royal Caribbean (NYSE: RCL) announced this morning that the outbreak of the H1N1 virus, or "swine flu," would negatively impact the company’s earnings by approximately $0.22 per share.

Last month, Royal Caribbean’s competitor Carnival Corporation (NYSE: CCL) announced that it would be negatively impacted by approximately $0.05 per share, with the potential for an additional negative $0.05 per share going forward.

The fact that the impact of the outbreak was notably greater to Royal Caribbean, relative to Carnival, is not surprising. The flu outbreak occurred just prior to the scheduled launch of a new Royal Caribbean product, Pacific Dream, targeting Mexican nationals. The company was forced to cancel the launch, and the ship sat idle. The associated expenses and lost revenue added to the expense of changing existing itineraries away from Mexican ports.

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