Cruise line operators continue to ride the tide of strong demand and buoyant booking levels this year. The trend has prompted Carnival Corp (NYSE:CCL) to undertake a strategic portfolio realignment that is set to boost its Carnival Cruise Line brand.
Boosting the Carnival Cruise Line Brand
Carnival, the largest cruise company globally, is boosting the capacity of its Carnival Cruise Line brand by absorbing the P&O Cruises Australia brand into its operations next year. This strategic move expands Carnival Cruise Line’s fleet by five new ships. Additionally, CCL has ordered two new Excel-class cruise ships, which are expected to join its fleet in 2027-2028.
The portfolio expansion comes on top of a 25% increase in Carnival Cruise Line’s capacity since 2019. Moreover, the phasing out of the P&O Cruises Australia brand, and its subsequent absorption into the Carnival Cruise Line brand, is expected to bolster CCL’s performance in the South Pacific. This improvement in performance is anticipated on the back of operational efficiencies. These will stem from the larger Carnival Cruise Line brand’s more streamlined operating and regulatory costs. Notably, CCL commands a nearly 60% market share in the Australian region with 19 ships.
Meanwhile, the strategic changes to the P&O Cruise brand in Australia do not impact P&O Cruise U.K., which is a separate brand dedicated to the U.K. market.
What Is the Price Target for CCL Stock
Carnival’s shares price is up by nearly 30.2% over the past year. Overall, the Street has a Strong Buy consensus rating on the stock, alongside an average CCL price target of $22. This points to a further upside potential of 37.4% in the company’s share price.
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