NEW YORK (TheStreet) -- Shares of Carnival (CCL) - Get Report are dropping 4.29% to $43.68 on heavy trading volume late Monday afternoon ahead of the cruise company's 2016 second quarter results due out before tomorrow's market open.

Wall Street is expecting the Miami-based company to report earnings of 39 cents per share on revenue of $3.68 billion.

During the same quarter last year, Carnival posted adjusted earnings of 25 cents per share on revenue of $3.59 billion.

Cruise lines and other sectors have been pressured in the last two trading sessions by the U.K.'s decision to leave the European Union. As a result, Susquehanna believes Carnival will be conservative when providing guidance tomorrow.

"Given Brexit, we believe Carnival will take every opportunity to be conservative as their share price is not likely to be rewarded on a short-term basis for a better guide at 2Q earnings," the firm wrote in a note cited by Barron's.

"Even if Carnival were to be optimistic about forward trends, it's probable that the market wouldn't believe them and would instead believe it is just too soon to see the demand shock," Susquehanna added.

About 9.36 million of the company's shares were traded by late this afternoon, above its average volume of 4.42 million shares per day.

Separately, TheStreet Ratings Team has a "Buy" rating with a score of B+ on the stock.

The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, reasonable valuation levels and expanding profit margins. 

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: CCL

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