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Miami, Florida-based Carnival Corporation & plc (CCL) is a cruise company that provides leisure travel services. Valued at a market cap of $24.8 billion, the company specializes in ocean-based vacations, offering a mix of luxury, premium, and budget-friendly cruise experiences.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and Carnival fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the travel services industry. The company boasts a diverse fleet of over 90 ships across nine leading brands, including Carnival Cruise Line, Princess Cruises, Holland America Line, and Seabourn. It is known for its innovative ship designs and onboard experiences, featuring attractions like water parks, fine dining, entertainment shows, and wellness centers.
This cruise vacation company has dipped 26% from its 52-week high of $28.72, reached on Jan. 31. Moreover, it has fallen 17.6% over the past three months, lagging behind the broader Consumer Discretionary Select Sector SPDR Fund’s (XLY) 12.2% loss over the same time frame.
Moreover, on a YTD basis, shares of CCL are down 14.7%, underperforming XLY’s 8.2% decrease. Nonetheless, in the longer term, CCL has rallied nearly 24.3% over the past 52 weeks, outpacing XLY’s 13.1% rise over the same time frame.
To confirm its recent bearish trend, CCL has been trading below its 50-day moving average since mid-February. However, it has remained above its 200-day moving average since early September, 2024, with slight fluctuations.
On Mar. 21, CCL released its strong Q1 earnings results, significantly surpassing expectations. The company posted adjusted earnings of $0.13 per share and revenue of $5.8 billion, with the top line increasing 7.5% year-over-year. Additionally, the bottom-line improved from a loss of $0.14 per share in the prior-year quarter, marking a notable turnaround. The strong results were driven by effective cost management and high demand for cruise vacations. Its operating income nearly doubled, surging 96.7% year over year. Carnival also demonstrated strategic financial management, reducing total debt to $27 billion from $27.5 billion in the last quarter. Meanwhile, total customer deposits hit a Q1 record of $7.3 billion, reflecting continued growth in ticket prices and pre-cruise onboard sales. Despite the positive results, CCL shares fell 1.2% on the day of the release but rebounded by 2.4% in the following trading session.
Carnival has lagged behind its rival, Royal Caribbean Cruises Ltd.’s (RCL) 65.1% rise over the past 52 weeks and 2.5% decline on a YTD basis.
Despite CCL’s recent underperformance relative to its broader sector, analysts remain highly optimistic about its prospects. The stock has a consensus rating of “Strong Buy” from the 23 analysts covering it, and the mean price target of $28.87 suggests a modest 35.8% premium to its current levels.
