Carnival (CCL) AI Stock Analysis

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Carnival

(NYSE:CCL)

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Outperform 70 (OpenAI - 5.2)

Rating:70Outperform

Price Target:

$36.00

▲(10.94% Upside)

CCL’s score is driven primarily by improving fundamentals and a strong earnings-call outlook (record 2025 performance, guidance strength, and capital return actions) alongside supportive technical momentum. Offsetting factors are the still-leveraged balance sheet, weaker 2025 free-cash-flow conversion, and margin/cost pressures noted in both the financial statements and 2026 cost guidance.

Positive Factors

Revenue & Profit Recovery

Carnival’s 2025 rebound to $26.6B revenue and $2.76B net income reflects durable demand recovery and restored operating leverage. Higher EBITDA margins and scale provide lasting capacity to fund fleet investments, marketing and shareholder returns assuming travel trends remain intact.

Solid Operating Cash Generation

Consistent ~ $6.2B operating cash flow gives Carnival resilient internal funding for working capital, maintenance capex and gradual deleveraging. Demonstrable cash generation supports the company’s ability to reinstate dividends and repurchase shares without full reliance on external financing.

Strong Forward Bookings & Brand Demand

Robust multi-year bookings and elevated pricing across core regions indicate durable demand and pricing power for Carnival’s diversified brand portfolio. High forward visibility reduces revenue volatility and supports better capacity planning and margin management over coming quarters.

Negative Factors

Elevated Absolute Leverage

Despite meaningful reduction from peak levels, ~$28B of debt and still-high leverage constrain financial flexibility. Elevated absolute debt increases interest and refinancing risk, limiting agility for large investments or cyclical downturns and slowing structural deleveraging.

Weak Free Cash Flow Conversion

FCF covering only ~42% of net income signals earnings quality and working capital sensitivity issues. Lower cash conversion reduces capacity to accelerate debt paydown or sustain growing shareholder returns absent improved conversion or higher recurring onboard spend.

Margin Pressure & Rising Costs

A sharp drop in gross margin reflects structural cost headwinds—higher non-fuel cruise costs, regulatory emission allowances and expected tax increases. These persistent cost pressures risk compressing long-term margins and require sustained pricing strength to fully offset.

Carnival (CCL) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$41.44B

Dividend YieldN/A

Average Volume (3M)16.43M

Price to Earnings (P/E)16.2

Beta (1Y)1.63

Revenue Growth6.39%

EPS Growth39.66%

CountryUS

Employees115,000

SectorConsumer Cyclical

Sector Strength84

IndustryLeisure

Share Statistics

EPS (TTM)0.34

Shares Outstanding1,236,706,700

10 Day Avg. Volume17,936,419

30 Day Avg. Volume16,426,810

Financial Highlights & Ratios

PEG Ratio0.31

Price to Book (P/B)2.77

Price to Sales (P/S)1.28

P/FCF Ratio13.05

Enterprise Value/Market Cap1.63

Enterprise Value/Revenue2.54

Enterprise Value/Gross Profit6.79

Enterprise Value/Ebitda9.81

Forecast

1Y Price Target

$37.41

Price Target Upside15.29% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering18

EPS Forecast (FY)2.56

Revenue Forecast (FY)$27.85B

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 generates revenue primarily through ticket sales for its cruises, which constitutes the largest portion of its income. Passengers pay for a variety of cruise packages that include accommodations, meals, and entertainment. Additionally, the company earns significant revenue from onboard spending, which includes purchases of beverages, specialty dining, spa services, excursions, and shopping. Another key revenue stream comes from travel-related services, such as pre- and post-cruise hotel accommodations and air travel arrangements. The company also benefits from partnerships with various travel agencies and online travel platforms, which help to sell its cruise packages. Moreover, Carnival's loyalty programs encourage repeat business, enhancing customer retention and driving additional revenue. Seasonal promotions and marketing campaigns further contribute to its earnings by attracting a diverse customer base.

Carnival Key Performance Indicators (KPIs)

Any

Passenger Cruise Days

Passenger Cruise Days
Measures the total number of days passengers spend on cruises, providing insight into overall customer engagement and cruise popularity.

Chart InsightsCarnival's passenger cruise days have shown a strong recovery since the pandemic, with consistent growth into 2025. The latest earnings call highlights record-breaking financial performance, with net income and yields surpassing expectations despite increased interest expenses. The company's strategic focus on cost discipline and new initiatives like Celebration Key are driving positive momentum. With strong booking trends for 2026 and beyond, Carnival is well-positioned for continued growth, although it faces potential cost headwinds from new programs and developments.

Data provided by:

The Fly

Carnival Earnings Call Summary

Earnings Call Date:Dec 19, 2025

(Q4-2025)

% Change Since: |

Next Earnings Date:Mar 20, 2026

Earnings Call Sentiment Positive

The earnings call reflects a strong performance in 2025 with record financial metrics, robust booking momentum, and successful cost management. Challenges include increased Caribbean capacity and geopolitical uncertainties impacting future guidance. Overall, Carnival is optimistic about 2026 with strategic developments and financial flexibility.

Q4-2025 Updates

Positive Updates

Record Performance in 2025

Carnival achieved historical fourth quarter highs for revenues, yields, operating income, and EBITDA in each quarter and for the full year, with net income over $3 billion, a 60% increase from 2024.

Strong Booking and Pricing Momentum

Booking volumes reached record levels for both 2026 and 2027, with prices at historical highs in North America and Europe despite low consumer sentiment.

Successful Cost Management

Unit costs improved by over 1 point better than initial guidance, with a 2.6% increase for the year due to effective cost management.

Resumption of Dividend

Carnival announced the resumption of their dividend at $0.15 per quarter, reflecting confidence in cash generation and balance sheet improvements.

Strategic Destination Developments

Significant developments at Celebration Key, Grand Bahama, and RelaxAway, Half Moon Cay are expected to drive future growth.

Deleveraging and Refinancing Success

Carnival reduced debt by over $10 billion since its peak and achieved an investment-grade net debt to adjusted EBITDA ratio of 3.4x.

Negative Updates

Impact of Caribbean Capacity Increase

Carnival's guidance fully incorporates a 14% increase in non-Carnival Corporation capacity growth in the Caribbean, leading to challenges in maintaining price integrity.

Challenges in the Arabian Gulf

Late-stage deployment changes due to geopolitical uncertainties in the Arabian Gulf affect yield guidance for 2026.

Higher Cruise Costs Expected

Cruise costs without fuel per ALBD are expected to increase by approximately 3.25% in 2026, driven by inflation and higher advertising expenses.

Regulatory and Tax Cost Increases

Expected regulatory costs related to emission allowances and higher income taxes driven by Pillar 2, costing $0.11 per share.

Company Guidance

During the Carnival Corporation's fourth-quarter 2025 earnings call, several impressive metrics were highlighted, demonstrating the company's strong performance. The company achieved historical highs for revenues, yields, operating income, and EBITDA, with a net income increase of over $3 billion, marking a 60% rise from 2024, surpassing initial guidance by over 30%. Full-year yields improved by more than 5.5%, exceeding initial guidance by almost 1.5 percentage points, while unit costs were managed to a 2.6% increase, bettering guidance by over 1 point. Operating and EBITDA margins rose by over 250 basis points year-over-year, leading to the highest operating income per available lower berth day (ALBD) in nearly 20 years, and EBITDA per ALBD reached an all-time high. The company also achieved a return on invested capital (ROIC) of over 13%, the highest in 19 years. Looking ahead, Carnival Corporation forecasts a 3% yield increase in 2026, despite a 14% increase in non-Carnival Corporation capacity growth in the Caribbean. The company aims to increase net income by over $350 million year-over-year and generate over $7.6 billion of EBITDA in 2026. Additionally, Carnival reinstated its dividend at $0.15 per quarter, plans to reduce net debt to EBITDA below 3x, and has initiated share repurchases, reflecting confidence in its financial stability and strong cash flow.

Carnival Financial Statement Overview

Summary

Strong recovery in profitability and scale (2025 revenue $26.6B; net income $2.76B; improved operating/EBITDA margins), supported by solid operating cash flow (~$6.2B). The score is constrained by still-elevated leverage (debt-to-equity ~2.28x with ~$28B debt), weaker cash conversion (FCF ~$2.6B; ~42% of net income), and notable 2025 gross margin pressure versus 2024.

Income Statement

Positive

Profitability and scale have rebounded sharply: revenue rose to $26.6B in 2025 (up from $25.0B in 2024 and $21.6B in 2023) and net income improved to $2.76B (from $1.92B in 2024 and a small loss in 2023). Operating performance strengthened with solid 2025 operating and EBITDA margins (~15.5% and ~26.0%). Key watchout: gross margin fell meaningfully in 2025 versus 2024 (~29.6% vs ~37.5%), suggesting cost pressure even as overall profits improved.

Balance Sheet

Neutral

The balance sheet is improving but still leveraged. Total debt declined to ~$28.0B in 2025 from ~$31.9B in 2023, and equity increased to ~$12.3B, bringing debt-to-equity down to ~2.28x (better than ~3.12x in 2024 and ~4.63x in 2023). Returns on equity are strong in 2024–2025 (~21%–22%), reflecting the earnings recovery. Main risk remains elevated absolute debt levels and continued reliance on a sizable capital structure versus equity.

Cash Flow

Positive

Cash generation is solid with operating cash flow of ~$6.2B in 2025 (up from ~$5.9B in 2024 and ~$4.3B in 2023) and free cash flow of ~$2.6B. However, free cash flow declined in 2025 versus 2024 (negative growth), and free cash flow covered less than half of net income in 2025 (~42%), indicating weaker cash conversion than earnings would suggest. Cash flow metrics are clearly healthier than the negative period in 2020–2022, but year-to-year volatility remains a consideration.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	26.62B	25.02B	21.59B	12.17B	1.91B
Gross Profit	7.88B	9.38B	7.28B	412.00M	-2.75B
EBITDA	6.91B	6.23B	4.37B	-2.20B	-5.69B
Net Income	2.76B	1.92B	-74.00M	-6.09B	-9.50B
Balance Sheet
Total Assets	51.69B	49.06B	49.12B	51.70B	53.34B
Cash, Cash Equivalents and Short-Term Investments	1.93B	1.21B	2.42B	4.03B	9.14B
Total Debt	27.99B	28.88B	31.89B	35.88B	34.61B
Total Liabilities	39.40B	39.81B	42.24B	44.64B	41.20B
Stockholders Equity	12.28B	9.25B	6.88B	7.06B	12.14B
Cash Flow
Free Cash Flow	2.61B	1.30B	997.00M	-6.61B	-7.72B
Operating Cash Flow	6.22B	5.92B	4.28B	-1.67B	-4.11B
Investing Cash Flow	-3.32B	-4.54B	-2.81B	-4.77B	-3.54B
Financing Cash Flow	-2.19B	-2.58B	-5.09B	3.58B	6.95B

Carnival Technical Analysis

Technical Analysis Sentiment

Positive

Last Price32.45

Price Trends

50DMA

28.79

Positive

100DMA

28.81

Positive

200DMA

27.41

Positive

Market Momentum

MACD

0.23

Negative

RSI

64.24

Neutral

STOCH

82.90

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCL, the sentiment is Positive. The current price of 32.45 is above the 20-day moving average (MA) of 30.19, above the 50-day MA of 28.79, and above the 200-day MA of 27.41, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 64.24 is Neutral, neither overbought nor oversold. The STOCH value of 82.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CCL.

Carnival Risk Analysis

Carnival disclosed 15 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 1 New Risks

Carnival Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CUK	72 Outperform	$41.32B	16.05	25.64%	―	6.39%	39.66%
CCL	70 Outperform	$41.44B	16.20	25.64%	―	6.39%	39.66%
OSW	70 Outperform	$2.00B	27.71	13.53%	0.79%	7.27%	45.12%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

* Consumer Cyclical Sector Average

Performance Comparison

CCL

Carnival

32.45

5.40

19.96%

CUK

Carnival

32.15

7.62

31.06%

OSW

OneSpaWorld Holdings

20.18

-0.84

-4.00%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Feb 03, 2026