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.
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.
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.
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.
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).