Friday, 27 September 2024
by BD Banks
Carnival (NYSE: CCL) will report earnings results for the fiscal third quarter on Sept. 30. Despite strong demand for cruise vacations, the shares have been range-bound this year, but Stifel Financial analyst Steven Wieczynski believes a better-than-expected earnings release could send the stock higher.
The analyst kept a buy rating on the shares and raised his price target from $25 to $27, representing upside of 44% from the current share price.
Carnival is coming off a strong quarter, with record revenue, operating income, customer deposits, and bookings. Management said there is “unprecedented demand” for 2025. This could tee off another strong earnings report for the third quarter.
As the company continues to pay down debt and reduce costs, more earnings growth should send the share price higher. The current consensus estimate has Carnival reporting adjusted earnings per share of $1.20 this year before increasing it again to $1.59 in fiscal 2025.
However, Wieczynski believes Carnival could also beat next year’s earnings estimate. Management continues to find costs to strip out of the business, which helped it beat guidance last quarter.
Most importantly, the demand for cruises continues to look incredibly strong. The booking curve for North America is at record levels, and this should continue to benefit pricing and boost profits.
The stock has rallied heading into the third-quarter earnings report, so investors are expecting good news, but the stock is still trading at a fair valuation. As investors start looking ahead to 2025 guidance, Carnival stock could hit new highs and head toward the analyst’s price target.
Before you buy stock in Carnival Corp., consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Carnival Corp. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $756,882!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 23, 2024
John Ballard has no position in any of the stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.