Carnival Corporation & plc CCL stock showcased outstanding performance in the past three months, significantly outperforming its industry peers and the S&P 500. This impressive upside is primarily driven by robust demand and increased booking volumes at substantially higher prices.
During this period, CCL experienced remarkable growth, surging by 25.6%, compared to the industry's 8.1% gain and the S&P 500's 10.6% increase. As of July 23, the stock closed at $19.07, just shy of its 52-week high of $19.74 and well above its 52-week low of $10.84.
In the same timeframe, other industry players have also seen notable gains. Royal Caribbean Cruises Ltd. RCL rose 24.1%, Norwegian Cruise Line Holdings Ltd. NCLH increased 5% and OneSpaWorld Holdings Limited OSW soared 36.5%.
Stock Performance
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Technical indicators suggest continued strong performance for CCL. The stock is trading above its 50-day moving averages, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in CCL's financial health and prospects.
50-Day Moving Averages
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What Lies Behind This Upsurge
Carnival is riding a wave of strong booking trends, significantly boosting its performance. The company reported record booking volumes for 2025, surpassing even the high levels of 2024 in terms of price and occupancy. In the fiscal second quarter, CCL saw higher booking prices due to limited remaining inventory for 2024. The pricing strength was particularly notable in the North America and Australia (NAA) and Europe segments, showing year-over-year growth for the third and the fourth quarter of 2024. Carnival's strategy to extend the booking curve and capitalize on favorable pricing trends led to record cumulative bookings for the rest of 2024, with occupancy rates exceeding those of 2023.
Looking ahead, Carnival anticipates a 4.5% increase in capacity for 2024 compared with 2023 levels. The upside is supported by a yield increase of over one percentage point to about 9.5%, driven by higher prices and ongoing strong demand, expected to generate around $200 million in revenues.
Carnival's strategic investment in advertising is also paying off. The company launched several new campaigns during the peak season, significantly boosting demand across its portfolio. In the fiscal first quarter, web traffic increased year over year, thanks to rises in natural and paid searches. Carnival has intensified its advertising efforts in Alaska with new campaigns to promote their land-sea experiences.
Fleet expansion is another key focus for Carnival. The company is pursuing additional initiatives to sustain its momentum and explore untapped revenue opportunities. Three new ships are in development — Carnival Jubilee (Carnival Cruise Line's third Excel-class ship), Sun Princess and Queen Anne (a new flagship for Cunard).
In the fiscal second quarter, Carnival launched Queen Anne in Liverpool, Sun Princess in Barcelona and Carnival Firenze in Long Beach. These launches received substantial media coverage and significantly boosted bookings, particularly for Sun Princess, which received positive guest feedback and demonstrated strong performance with high satisfaction scores and revenue yield. Alongside the contributions from these new ships, Carnival also saw strong double-digit growth in yields from its existing fleet.
CCL Trading at a Discount
The company is currently valued at a discount compared with its industry on a forward 12-month P/E basis. CCL’s forward 12-month price-to-earnings ratio stands at 13.85, lower than the industry’s ratio of 16.74 and the S&P 500's ratio of 21.71. This indicates that despite the recent stock price increase in the past three months, it remains an attractive option for investors looking for a discounted entry point.
Image Source: Zacks Investment Research
Estimate Revision Favoring the Stock
Reflecting the positive sentiment around CCL, the Zacks Consensus Estimate for earnings per share has seen upward revisions. Over the past 60 days, analysts have increased their estimates for both the current and next fiscal year by 14.7% to $1.17 and by 4.2% to $1.49 per share, respectively.
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Conclusion
Investors might find CCL appealing for their portfolios, given its current Zacks Rank #2 (Buy) rating. With its strong market performance, robust booking trends, effective marketing strategies and strategic fleet expansion, the company presents a highly attractive investment opportunity. Trading at a discount relative to its industry peers and supported by positive analyst sentiment, CCL offers significant growth potential for investors looking to capitalize on its upward momentum.
As of May 31, 2024, total customer deposits amounted to $8.3 billion, compared with $7 billion reported in the previous quarter, exceeding the $7.2 billion reported on May 31, 2023. CCL expects to maintain mid-single-digit per diem growth through the rest of the year, marking eight consecutive quarters of these improvements. The company's focus on optimizing the yield curve is likely to benefit in future periods.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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