Carnival reports Q3 results September 27

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What's Happening

Cruise ship operator Carnival ( CCL ) is scheduled to announce third-quarter results before the market open September 27. The consensus calls for earnings of $2.31 per share, versus $2.29 during the same period last year. CCL is basically flat on the year, with shares up a modest 0.3% year to date.

Technical Analysis

CCL was recently trading at $67.04 down $5.66 from its 12-month high and $10.59 above its 12-month low. InvestorsObserver's Stock Score Report gives CCL a 64 long-term technical score and a 74 short-term technical score. The stock has recent support above $62.50 and recent resistance below $68. Of the 13 analysts who cover the stock 9 rate it Strong Buy, 0 rate it Buy, 4 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell. CCL gets a score of 74 from InvestorsObserver's Stock Score Report.

Analyst's Thoughts

CCL has enjoyed a nice bull run following the company's last quarterly report in late June. The company posted earnings and sales that were better than expected, which helped the stock break a downward trend and the stock has managed to trade just slightly into positive territory for the year. In order to maintain its current momentum the company will need a strong report, and the street does expect another earnings beat. Traders have a whisper number of $2.36 for the quarter, slightly above the $2.31 consensus, so Carnival will need to beat the consensus and get close to the whisper for shares to extend their bull run. The stock has a forward P/E of 14 and earnings are expected to rise by 12.3% per annum over the next five years. Analysts have an average price target of $72.84.

Stock Only Trade

If you're looking to establish a long stock position in CCL consider buying the stock under $67. Sell if it falls below $62 or take profits if it gets to $77.

Bullish Trade

If you want a bullish hedged trade on the stock, consider a 1/18/19 52.50/57.50 bull-put credit spread for a $0.25 credit. That's a potential 5.3% return (16.1% annualized*) and the stock would have to fall 14.8% to cause a problem.

Bearish Trade

If you want to take a bearish stance on the stock at this time, consider an 1/18/19 75/80 bear-call credit spread for a $0.30 credit. That's a potential 6.4% return (19.6% annualized*) and the stock would have to rise 12.1% to cause a problem.

Covered Call Trade

If you like the stock but wish to lower your cost basis on a new position, you may want to consider a 1/18/19 $67.50 covered call. Buy CCL shares (typically 100 shares, scale as appropriate), while selling the 1/18/19 $67.50 call for a debit of $64.19, per share. The trade has a target assigned return of 5.2%, and a target annualized return of 15.8% (for comparison purposes only).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Originally published on InvestorsObserver.com

This article appears in: Investing , Options
Referenced Symbols: CCL

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