Later this week, earnings reports for both Carnival Corporation (CCL) and Carnival PLC (CUK) are expected.  Zacks senior travel & leisure industry analyst Sean P. Smith explains why he is taking a 'wait and see' approach with the shares right now:

'We maintain our Hold rating for both Carnival Corporation and Carnival PLC. We expect Carnival to continue to trade at a premium to its largest competitor over the near-term. However, given our expectation for flat operating margins and continued pricing pressure in the Caribbean, we do not feel that further material price appreciation is warranted at this time.

'Our six-month target price of $50 for CCL is based on a multiple of approximately 15x our 2008 earnings estimate. The company is scheduled to report third quarter financial results on September 20, and we will update our model and outlook at that time.

'Carnival's cruise ships offer various itineraries to passengers worldwide under leading cruise brands. In North America, the company services the contemporary cruise segment through its Carnival brand, the premium cruise segment through its Holland America and Princess brands, and the luxury cruise segment through its Seabourn and Windstar brands.'