The Carnival PLC (Carnival) ADR hit our target price on 01 July 2009, supported by positive investor reaction to the company's healthy fundamentals, which were discussed in our previous update report, as well as a broad-based rally in equity markets around the world. However, at current levels, we feel the stock's medium-to-long term upside potential has been exhausted. Therefore, we downgrade the ADR from a BUY to a HOLD. We will reassess our ADR rating in our next full update report. We continue to anticipate a significant negative currency impact on the UK stock over the coming 6- 24 months. Therefore, we downgrade the UK stock from a HOLD to a SELL. We will reassess our UK stock rating in our next full update report.

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