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Carnival (CCL)
NYSE:CCL
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Carnival
(NYSE:CCL)
69Neutral
Positive Factors
Booking Trends
Strong booking trends, ongoing capacity expansion, the upcoming introduction of Celebration Key, and ongoing operation efficiencies will continue to drive increasing revenue growth and yield.
Financial Performance
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.
Market Position
CCL is highlighted as a top pick due to bullish trends, including higher occupancy and ticket prices.
Negative Factors
Market Risk
Current market prices for CCL nearly reflect a recession scenario, indicating potential risk if a recession occurs.
Regulatory Risk
The prospect of losing tax-exempt status is a concern for the cruise industry and is viewed as a potential risk.
Revenue Risk
In deeper downturn scenarios, Carnival Corporation's revenue per passenger is expected to decline significantly.
Carnival (CCL) vs. S&P 500 (SPY)
Market Cap
$25.39B
Dividend YieldN/A
Average Volume (3M)27.45M
Price to Earnings (P/E)13.0
Beta (1Y)1.83
Revenue Growth12.66%
EPS Growth403.58%
CountryUS
Employees115,000
SectorConsumer Cyclical
Sector Strength59
IndustryLeisure
Share Statistics
EPS (TTM)1.50
Shares Outstanding1,166,606,900
10 Day Avg. Volume20,949,257
30 Day Avg. Volume27,447,371
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.32
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit6.28
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$27.54Price Target Upside40.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
Carnival Business Overview & Revenue Model
Company DescriptionCarnival 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 MoneyCarnival 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's financial performance shows a strong recovery with significant revenue growth and improved profit margins. However, the high debt-to-equity ratio and historical financial volatility present risks. The company is generating robust cash flows, but the need for debt management remains critical.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.75
Positive
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.60
Neutral
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.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 25.02B | 21.59B | 12.17B | 1.91B | 5.59B | Gross Profit |
| 9.38B | 7.28B | 412.00M | -2.75B | -2.65B | EBIT |
| 3.57B | 1.96B | -4.38B | -7.09B | -8.87B | EBITDA |
| 6.23B | 4.37B | -2.20B | -5.69B | -7.12B | Net Income Common Stockholders |
| 1.92B | -74.00M | -6.09B | -9.50B | -10.24B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.21B | 2.42B | 4.03B | 9.14B | 9.51B | Total Assets |
| 49.06B | 49.12B | 51.70B | 53.34B | 53.59B | Total Debt |
| 28.88B | 31.89B | 35.88B | 34.61B | 28.38B | Net Debt |
| 27.67B | 29.48B | 31.85B | 25.67B | 18.87B | Total Liabilities |
| 39.81B | 42.24B | 44.64B | 41.20B | 33.04B | Stockholders Equity |
| 9.25B | 6.88B | 7.06B | 12.14B | 20.55B |
| Cash Flow | Free Cash Flow | |||
| 1.30B | 997.00M | -6.61B | -7.72B | -9.92B | Operating Cash Flow |
| 5.92B | 4.28B | -1.67B | -4.11B | -6.30B | Investing Cash Flow |
| -4.54B | -2.81B | -4.77B | -3.54B | -3.24B | Financing Cash Flow |
| -2.58B | -5.09B | 3.58B | 6.95B | 18.65B |
Carnival Technical Analysis
Neutral
19.57
Price Trends
19.88
Negative
22.82
Negative
21.15
Negative
Market Momentum
-0.27
Negative
54.73
Neutral
71.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCL, the sentiment is Neutral. The current price of 19.57 is above the 20-day moving average (MA) of 18.06, below the 50-day MA of 19.88, and below the 200-day MA of 21.15, indicating a neutral trend. The MACD of -0.27 indicates Negative momentum. The RSI at 54.73 is Neutral, neither overbought nor oversold. The STOCH value of 71.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CCL.
Carnival Risk Analysis
Carnival disclosed 14 risk factors in its most recent earnings report. Carnival reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Carnival Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Performance Comparison
CCL
Carnival
19.57
4.97
34.04%
CUK
Carnival
17.83
4.51
33.86%
OSW
OneSpaWorld Holdings
18.39
3.77
25.79%
Carnival Earnings Call Summary
Earnings Call Date:Mar 21, 2025
(Q1-2025)
| % Change Since: -7.69%|
Next Earnings Date:Jun 19, 2025
Earnings Call Sentiment Positive
The earnings call conveyed a very strong performance in the first quarter with record-breaking revenue and yield metrics, successful debt refinancing, and robust consumer demand. Despite acknowledging some macroeconomic and geopolitical volatility, the overall outlook remains positive with increased guidance for the full year and significant marketing and operational achievements.Q1-2025 Updates
Positive Updates
Record-Breaking First Quarter Performance
Achieved first quarter high watermarks for revenue, EBITDA, operating income, and customer deposits. Net income exceeded guidance by over $170 million, with operating margins and EBITDA margins each improving over 400 basis points year-over-year.
Substantial Yield and Revenue Growth
Reported a robust 7.3% yield increase, surpassing yield guidance. Yield growth for the full year is now expected at 4.7%. EBITDA reached $1.2 billion, a nearly 40% increase year-over-year.
Successful Refinancing Efforts
Refinanced $5.5 billion of debt, resulting in $145 million in annualized interest expense savings. The refinancing efforts contributed to lowering the full-year interest expense guidance by $100 million.
Strong Consumer Demand and Marketing Success
Historical high prices across all core programs for 2025 and record booking volumes for 2026. Marketing campaigns during wave season generated over 5 billion impressions.
Operational and Environmental Achievements
Progress on optimizing the portfolio, including the sale of Seaborn Sojourn. Achieved a 19% reduction in carbon intensity compared to 2019, nearing the 2026 greenhouse gas target.
Negative Updates
Macroeconomic and Geopolitical Volatility
Acknowledged heightened macroeconomic and geopolitical volatility, although the company demonstrated resilience. There was no specific negative impact reported, but the backdrop remains uncertain.
Increased Dry Dock Costs
Higher than expected dry dock costs due to unplanned dry docks, affecting cruise costs without fuel per ALBD.
Company Guidance
In the recent earnings call, Carnival Corporation & plc reported a strong first quarter for fiscal year 2025, achieving high watermarks in revenue, EBITDA, and operating income. The company exceeded its net income guidance by more than $170 million, driven by a robust 7.3% yield increase, surpassing their yield guidance. The quarter saw a near doubling of operating income and $1.2 billion in EBITDA, marking a 40% year-over-year increase. Operating and EBITDA margins improved by over 400 basis points compared to the previous year, with both now surpassing 2019 levels. Despite macroeconomic volatility, Carnival raised its full-year yield guidance to 4.7% and increased its earnings guidance for the year by $185 million, projecting approximately $600 million in incremental earnings. The company is on track to reach its 2026 financial targets a year early, with a targeted ROIC of 12% and EBITDA per ALBD over 50% higher than two years ago. Additionally, Carnival is progressing towards its 2026 greenhouse gas target, with a 19% reduction in carbon intensity compared to 2019. Customer demand remains strong, with historical high prices for 2025 bookings and record booking volumes for 2026. The company also highlighted successful marketing campaigns and ongoing infrastructure projects, such as the development of Celebration Key in the Caribbean and expansions in Alaska, which are expected to enhance future customer experiences and demand.Carnival Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Carnival Reduces Debt with $1 Billion Note Offering
Positive
Feb 28, 2025
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.
Private Placements and FinancingBusiness Operations and Strategy
Carnival Reduces Interest Costs with New Debt Offering
Positive
Feb 28, 2025
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.
Private Placements and FinancingBusiness Operations and Strategy
Carnival’s $2 Billion Offering to Refinance Debt
Positive
Feb 7, 2025
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.
Private Placements and FinancingBusiness Operations and Strategy
Carnival’s $2 Billion Note Offering to Reduce Costs
Positive
Feb 7, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.