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Carnival: Set To Cruise Back Up (Rating Upgrade)

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Update - June 24, 2024

Carnival reported a huge quarter with massive cash flows. Not sure why the market got so negative on the stock, but the cruise line is now far more profitable than thought. The $17 stock likely has earnings power of up to $2 in a few years. 

-Q2 Non-GAAP EPS of $0.11 beats by $0.13.
-Revenue of $5.78B (+17.7% Y/Y) beats by $90M.
-Total customer deposits reached an all-time high of $8.3 billion, surpassing the previous record by $1.1 billion ($7.2 billion as of May 31, 2023).

Original article posted on May 13, 2024

  • Carnival Corporation & plc stock has trended down to $14, providing an opportunity for investors to buy back in.
  • The upcoming August quarter is expected to bring strong earnings finally for Carnival, with a quarterly profit topping $1 per share.
  • Carnival's positive cash flows will help boost profits through debt repayment and cutting interest expenses.
  • The stock trades at just 10x FY25 EPS targets, with upside potential from higher sales growth.
After hitting a double top around $20 at the end of 2023, Carnival Corporation & plc (NYSE:CCL) has trended back down, providing the opportunity to get back into the cruise line stock. Carnival is now entering a period of strong earnings and cash flows to reposition the company. My investment thesis is now more Bullish, with the stock back down at $14.

Read the full article on Seeking Alpha. 

Disclosure. No position mentioned. Please review the disclaimer page for more details. 


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