Carnival (CCL) AI Stock Analysis

• Market Cap: $21.39B
• Dividend Yield: N/A
• Average Volume (3M): 27.67M
• Price to Earnings (P/E): 11.0
• Beta (1Y): 1.96
• Revenue Growth: 12.66%
• EPS Growth: 403.58%
• Country: US
• Employees: 115,000
• Sector: Consumer Cyclical
• Sector Strength: 61
• Industry: Leisure
• EPS (TTM): 1.50
• Shares Outstanding: 1,166,606,900
• 10 Day Avg. Volume: 24,255,059
• 30 Day Avg. Volume: 27,667,030
• PEG Ratio: 0.03
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.13
• Price to Cash Flow (P/CF): 7.80
• P/FCF Ratio: 7.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $28.86
• Price Target Upside: 74.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

Carnival Corporation has shown significant financial recovery with strong revenue and profit growth, yet high leverage poses a risk that needs addressing. Technical indicators present a mixed picture with bearish short-term signals. The company's valuation is reasonable, but the lack of dividend yield reduces its appeal to some investors. The recent earnings call was very positive, highlighting strong performance and future guidance, which bolsters the overall outlook.

Positive Factors

Earnings

Carnival Corporation reported strong EBITDA and EPS for the first quarter, exceeding both analyst and consensus expectations due to higher net yields and better cost management.

Growth Potential

CCL is highlighted as a top pick due to bullish trends, including higher occupancy and ticket prices.

Market Positioning

CCL is well-positioned to benefit from resilient cruise demand spending driven by the exceptional value of cruise base vacations and increasing penetration in the over $2 trillion and growing global travel market.

Negative Factors

Regulatory Risk

The prospect of losing tax-exempt status is a concern for the cruise industry and is viewed as a potential risk.

Valuation Concerns

Despite a 43% year-to-date gain, CCL is still considered undervalued, with potential for further gains.

Carnival Business Overview & Revenue Model

Company Description

Carnival Corporation & plc operates as a leisure travel company. Its ships visit approximately 700 ports under the Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK), and Cunard brand names. The company also provides port destinations and other services, as well as owns and owns and operates hotels, lodges, glass-domed railcars, and motor coaches. It sells its cruises primarily through travel agents, tour operators, vacation planners, and websites. The company operates in the United States, Canada, Continental Europe, the United Kingdom, Australia, New Zealand, Asia, and internationally. It operates 87 ships with 223,000 lower berths. Carnival Corporation & plc was founded in 1972 and is headquartered in Miami, Florida.

How the Company Makes Money

Carnival Corporation & plc generates revenue primarily from its cruise operations, with ticket sales being the primary revenue stream. This includes the sale of cabin accommodations for various cruises offered by its different cruise lines. Additionally, the company earns significant income from onboard spending, which encompasses dining, beverages, casino gaming, retail purchases, excursions at ports of call, and other entertainment options provided during the voyage. Carnival also benefits from partnerships and collaborations with travel agencies, tour operators, and local businesses at port destinations, which enhance their service offerings and can drive further revenue. Key factors contributing to its earnings include fleet capacity utilization, pricing strategies, and the ability to attract and retain customers through marketing and loyalty programs.

Carnival Financial Statement Overview

Summary

Carnival shows a solid financial recovery with strong revenue and profit growth, improved margins, and positive cash flow. However, high leverage and historical volatility during the pandemic impact the overall financial health assessment. Debt reduction is crucial for future stability.

Income Statement

Carnival's income statement shows a strong recovery, with a notable revenue growth of 17.4% from 2023 to 2024 and continued growth into TTM. The gross profit margin in TTM is 38.2%, and the net profit margin is 8.1%, indicating improved profitability. However, the past years of negative net income and operating losses during the pandemic are still a concern.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 3.09 in TTM, a significant risk. However, the stabilization of stockholders' equity at $9.18 billion and an equity ratio of 19.3% show some improvement. Carnival's high leverage remains a challenge, necessitating careful debt management.

Cash Flow

Carnival's cash flow statements indicate robust cash generation with operating cash flow of $5.08 billion in TTM and a free cash flow growth of 53.0% from 2023 to 2024. The operating cash flow to net income ratio of 2.47 suggests effective cash conversion, but historical negative free cash flow years underline potential vulnerabilities.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
25.43B	25.02B	21.59B	12.17B	1.91B	5.59B
	Gross Profit
9.72B	9.38B	7.28B	412.00M	-2.75B	-2.65B
	EBIT
3.84B	3.57B	1.96B	-4.38B	-7.09B	-8.87B
	EBITDA
6.32B	6.23B	4.37B	-2.20B	-5.69B	-7.12B
	Net Income Common Stockholders
2.05B	1.92B	-74.00M	-6.09B	-9.50B	-10.24B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
753.00M	1.21B	2.42B	4.03B	9.14B	9.51B
	Total Assets
36.73B	48.28B	49.12B	51.70B	53.34B	53.59B
	Total Debt
10.64B	28.88B	31.89B	35.88B	34.61B	28.38B
	Net Debt
9.89B	27.67B	29.48B	31.85B	25.67B	18.87B
	Total Liabilities
15.31B	39.03B	42.24B	44.64B	41.20B	33.04B
	Stockholders Equity
21.42B	9.25B	6.88B	7.06B	12.14B	20.55B
Cash Flow		Free Cash Flow
1.99B	1.30B	997.00M	-6.61B	-7.72B	-9.92B
	Operating Cash Flow
5.08B	5.92B	4.28B	-1.67B	-4.11B	-6.30B
	Investing Cash Flow
-2.98B	-4.54B	-2.81B	-4.77B	-3.54B	-3.24B
	Financing Cash Flow
-3.51B	-2.58B	-5.09B	3.58B	6.95B	18.65B

Carnival Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCL, the sentiment is Negative. The current price of 16.5 is below the 20-day moving average (MA) of 19.90, below the 50-day MA of 23.07, and below the 200-day MA of 21.10, indicating a bearish trend. The MACD of -0.90 indicates Negative momentum. The RSI at 34.82 is Neutral, neither overbought nor oversold. The STOCH value of 18.58 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CCL.

Carnival Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXPE	75 Outperform	$19.63B	17.03	79.84%	0.26%	6.64%	69.85%
RCL	75 Outperform	$47.89B	16.27	46.85%	0.95%	18.60%	65.95%
CCL	66 Neutral	$21.39B	10.99	25.87%	―	12.66%	403.58%
NCLH	63 Neutral	$6.90B	8.85	105.46%	―	10.87%	433.82%
TRIP	61 Neutral	$1.82B	708.48	0.55%	―	2.63%	-58.77%
Sector *	59 Neutral	$11.22B	10.13	-1.22%	3.96%	1.32%	-18.57%
LIND	44 Neutral	$437.24M	―	21.42%	―	13.20%	28.95%

Carnival Corporate Events

Carnival Reduces Debt with $1 Billion Note Offering

On February 28, 2025, Carnival Corporation closed a private offering of $1.0 billion in senior unsecured notes with a 5.750% interest rate due in 2030. The proceeds, along with cash on hand, were used to redeem $1.0 billion of higher-interest notes, reducing the company’s interest expense by over 4.5% and saving approximately $45 million annually. This strategic move is part of Carnival’s ongoing efforts to manage its debt and reduce financial costs, potentially strengthening its financial position and operational flexibility.

Carnival Reduces Interest Costs with New Debt Offering

On February 28, 2025, Carnival Corporation closed a private offering of $1.0 billion in senior unsecured notes with a 5.750% interest rate, maturing in 2030. The proceeds were used to redeem existing 10.500% senior unsecured notes, reducing the company’s interest expense by over 4.5%, which is expected to lower annual interest costs by approximately $45 million. This strategic financial maneuver is part of Carnival’s ongoing efforts to manage debt and reduce interest expenses, potentially improving its financial health and operational flexibility.

Carnival’s $2 Billion Offering to Refinance Debt

On February 7, 2025, Carnival Corporation closed a private offering of $2.0 billion in senior unsecured notes due 2033, aimed at refinancing existing debt and reducing interest expenses. This move is part of Carnival’s broader strategy to lower interest costs, simplify its capital structure, and manage future debt maturities, resulting in an annual interest expense reduction of over $80 million.

Carnival’s $2 Billion Note Offering to Reduce Costs

On February 7, 2025, Carnival Corporation closed a private offering of $2.0 billion in senior unsecured notes due 2033, using the proceeds to redeem $2.03 billion in higher-interest senior priority notes due 2028. This financial maneuver is part of Carnival’s strategy to reduce interest expenses, which is expected to lower net annual interest costs by over $80 million, simplify its capital structure, and manage future debt maturities, thereby impacting its financial health positively.

Carnival Corporation Reprices Loans to Enhance Stability

Carnival Corporation has announced the repricing of approximately $700 million in term loans maturing in 2027 and $1.75 billion in loans maturing in 2028, as part of their ongoing efforts to reduce interest expenses. This repricing is anticipated to save the company around $18 million annually, potentially enhancing their financial stability and competitiveness within the leisure travel industry.

Carnival Enhances Financial Health with Loan Repricing

Carnival Corporation announced the repricing of approximately $700 million in term loans maturing in 2027 and $1.75 billion in term loans maturing in 2028 as part of its ongoing efforts to reduce interest expenses. This repricing is expected to save the company around $18 million annually in interest expenses, enhancing its financial efficiency and potentially benefiting stakeholders by improving overall financial health.

Carnival Announces Leadership Change with Board Member Departure

Sara Mathew has decided not to stand for re-election at Carnival Corporation’s 2025 Annual Meetings, choosing to focus on other business ventures. Her departure from the Board of Directors may influence the company’s strategic direction as new leadership steps in, potentially impacting its market position and stakeholder interests.

Sara Mathew to Step Down from Carnival Board

Sara Mathew has decided not to seek re-election to Carnival’s Board of Directors to focus on other business ventures, and will step down following the 2025 Annual Meetings of Shareholders, expected in April. This decision marks a change in the board’s composition, potentially impacting the company’s strategic direction and governance.