Carnival Company and today
carnival company &
(As of 05:45 PM ET)
- 52 week range
- $13.78
▼
$27.17
- P/E ratio
- 22.97
- Price target
- $26.85
Carnival Cruise Lines New York Stock Exchange: CCL The stock price is up nearly 50% for 2024 and is rising in the second half because business is strong. FY2025 details include sustained growth after the industry returns to normal, record results, and improved guidance. Results include healthy cash flow, balance sheet improvements, and expectations for quality recovery of investment grade debt. The bottom line is that financial health is improving and is expected to continue to improve to the point that dividends may resume soon, and with them, stock buybacks are an important incentive to improve shareholder value.
Carnival guests party like it’s 1999
Carnival Cruise Lines had a strong fourth quarter, with revenue rising 10% to a record high. The strength was driven by volume, ticket pricing and on-board spending, all of which are at record levels. Top line strength is compounded by operational efficiencies and improved revenue metrics, with costs rising less than revenues. The company’s gross profit margin improved by about 2,000 basis points to reverse operating losses recorded in the previous year. Adjusted EBITDA was $1.2 billion, a record high and up nearly 30% year over year.
The guidance is considered strong and is likely to lead analysts to revise results and stock sentiment. The company says customer bookings in the fourth quarter are at record levels and increasing, driven by on-board tickets and add-ons. Advanced booking has also reached record levels, extending through 2026, and EBITDA per lower suite is expected to reach its highest level in two decades. Adjusted net income is expected to reach +20% in 2025, which may be a cautious estimate given travel trends.
As strong as business trends are, the balance sheet improvements are even more impressive. The company paid off $3.3 billion in debt, bringing the total debt since its peak to nearly $8 billion. Year-end balance sheet highlights include a lower cash position, offset by strong cash flow, and lower debt and liabilities, resulting in a significant increase in equity. Equity has increased by 50% and is likely to continue to grow as debt is paid off and the balance sheet is restored to its previous strength. In terms of leverage, long-term debt is less than 3 times equity, which is a healthy ratio for any stock.
Analyst tailwinds are unlikely to stop in 2025
Carnival Corporation and stock forecasts today
$26.85
4.36% upModerate purchase
Based on 18 analyst ratings
| High expectations | $34.00 |
|---|---|
| Average expectations | $26.85 |
| Low expectations | $16.50 |
Carnival Company and stock forecast details
Analyst sentiment has been positive for Carnival for more than a year, with increased coverage, improving sentiment, and an upward trend in the consensus price target. These trends are unlikely to end now that the F2025 forecast has been released and are likely to strengthen. Until then, the consensus of 18 analysts tracked by MarketBeat is a moderate buy with a price target of $26.60. The $26.60 price target assumes the stock is somewhat valued at its mid-December high, but the revision trend suggests a move above $30 is likely, the multi-year high set to be set in 2025.
Institutional activity is equally bullish. Institutions have bought this stock on balance every quarter in 2024, with dollar volume of buys outpacing sells by a ratio of 2:1. Institutions own over 65% of the stock and provide a strong upside to the price action.
Carnival cruise lines could hit $40 in 2025
Carnival Cruise Line’s technical indicators are bullish. After a brief consolidation period, the stock rose in the second half of 2024 and showed support at the 30-day EMA. Confirmed support at the 30-day EMA suggests the uptrend will continue and the $5 rally may extend to $13. The $5 advance is in line with the analyst revision trend, while the $13 bull case target aligns this market with pre-coronavirus price points, where its financial health suggests it should be traded.
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