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Carnival Corporation & plc (CUK)
NYSE:CUK
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Carnival
(NYSE:CUK)
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Rating:77Outperform
Price Target:
$35.00
▲(49.13% Upside)
Carnival's overall stock score is driven by its strong financial performance and positive earnings call, which highlight robust revenue growth, improved profitability, and strategic initiatives. While the technical analysis indicates a potential overbought condition, the company's valuation remains reasonable, and the reinstatement of dividends reflects confidence in future cash flows. The absence of significant corporate events further solidifies the focus on financial and operational metrics.
Positive Factors
Revenue Growth
The significant revenue growth indicates strong recovery and demand in the leisure industry, enhancing Carnival's market position and financial health.
Cash Generation
Strong cash generation supports operational and strategic initiatives, providing Carnival with the flexibility to invest in growth and manage debt effectively.
Cost Management
Effective cost management enhances profitability and operational efficiency, allowing Carnival to better navigate inflationary pressures and maintain competitive pricing.
Negative Factors
High Debt Levels
While leverage has improved, high debt levels can limit financial flexibility and increase risk, necessitating continued focus on debt reduction.
Regulatory Costs
Increased regulatory costs can impact profitability and require strategic adjustments to maintain margins, affecting long-term financial performance.
Caribbean Market Challenges
Increased competition in the Caribbean market could pressure pricing and market share, challenging Carnival's growth and profitability in this key region.
Carnival (CUK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$41.58B
Dividend YieldN/A
Average Volume (3M)1.89M
Price to Earnings (P/E)15.7
Beta (1Y)1.57
Revenue Growth6.39%
EPS Growth39.66%
CountryUS
Employees115,000
SectorConsumer Cyclical
Sector Strength84
IndustryLeisure
Share Statistics
EPS (TTM)0.34
Shares Outstanding188,483,860
10 Day Avg. Volume1,422,484
30 Day Avg. Volume1,886,165
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)3.50
Price to Sales (P/S)1.29
P/FCF Ratio24.98
Enterprise Value/Market Cap1.63
Enterprise Value/Revenue2.59
Enterprise Value/Gross Profit6.56
Enterprise Value/Ebitda10.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)2.54
Revenue Forecast (FY)$27.83B
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 the sale of cruise tickets and onboard services. Ticket sales represent a significant portion of its income, with customers purchasing cruise packages that include accommodations, meals, and entertainment. Additionally, Carnival earns substantial revenue from onboard spending, which encompasses purchases made by guests during their cruise, including dining at specialty restaurants, spa services, excursions, and shopping. The company also has partnerships with various travel agencies and online travel platforms that help in marketing and distributing its cruise offerings. Furthermore, Carnival benefits from brand loyalty programs and promotional campaigns that encourage repeat business, contributing to its long-term revenue growth.
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 highlighted a record-breaking financial performance for 2025 with strong cost management and booking volumes, leading to a positive outlook for 2026. However, challenges such as increased capacity in the Caribbean and low consumer sentiment present potential risks. The reinstatement of dividends and achievement of an investment-grade leverage ratio demonstrate financial strength, outweighing the lowlights.Q4-2025 Updates
Positive Updates
Record-Breaking Financial Performance
The company delivered historical highs for revenues, yields, operating income, and EBITDA for both the fourth quarter and the full year 2025, with net income exceeding $3 billion, a 60% increase over 2024.
Successful Cost Management
Unit costs improved over 1 point better than initial guidance with a 2.6% increase for the year, effectively mitigating inflation and higher expenses.
Strong Booking Volumes
Achieved record booking volumes for 2026 and 2027, with customer deposits up 7% year-over-year, hitting an all-time high.
Reinstatement of Dividend
Resumed dividend at an initial rate of $0.15 per quarter, reflecting confidence in cash generation and balance sheet improvements.
Investment-Grade Leverage
Achieved an investment-grade net debt to adjusted EBITDA ratio of 3.4x at year-end 2025, with significant debt reduction achieved over the past three years.
Negative Updates
Challenges in the Caribbean Market
Significant increase in non-Carnival Corporation capacity growth in the Caribbean, posing potential challenges for 2026.
Consumer Sentiment Concerns
Despite strong performance, there were mentions of U.S. consumer sentiment reaching low levels, which could impact future booking behaviors.
Regulatory and Tax Increases
Regulatory costs related to emission allowances and higher income taxes are expected to cost $0.11 per share in 2026.
Company Guidance
During the Carnival Corporation & plc Fourth Quarter 2025 Earnings Call, the company provided detailed guidance and key performance metrics that highlighted its robust financial health and strategic direction. Carnival reported a net income of over $3 billion for the year, marking a 60% increase over 2024 and exceeding initial guidance by more than 30%. Full-year yields improved by over 5.5%, surpassing initial projections by 1.5 percentage points. The company also achieved a 2.6% increase in unit costs, which was better than initial guidance by over one percentage point. Operating margins and EBITDA margins rose by more than 250 basis points year-over-year, leading to the highest operating income per Available Lower Berth Day (ALBD) in nearly two decades. The company guided a 3% yield increase for 2026, incorporating a 4% capacity growth and a 14% increase in non-Carnival Corporation capacity in the Caribbean. Carnival also reported a 3.25% expected growth in unit costs for 2026, with net cruise cost ex-fuel per ALBD projected to rise by about 2.5%. Additionally, the company announced the resumption of its dividend at $0.15 per quarter, reflecting confidence in sustained cash generation and a strengthened balance sheet. These metrics underscore the company's strong operational performance and strategic initiatives aimed at maintaining growth and shareholder value.Carnival Financial Statement Overview
Summary
Carnival's financial performance is strong, with impressive revenue growth and improved profitability. The company has reduced its leverage, although it remains relatively high. Cash flow generation is robust, supporting operational and strategic initiatives. Overall, Carnival is on a positive trajectory, but it needs to continue managing its debt levels and further align cash flows with profitability.Income Statement
Carnival has shown impressive revenue growth with a 99% increase in TTM, indicating strong recovery and demand in the leisure industry. The gross profit margin improved to 39.5%, and the net profit margin reached 10.1%, reflecting enhanced operational efficiency and profitability. EBIT and EBITDA margins also improved, showcasing effective cost management and operational leverage.Balance Sheet
The debt-to-equity ratio decreased to 2.34 from previous higher levels, indicating improved financial leverage, although it remains relatively high. Return on equity improved significantly to 26.2%, reflecting better profitability and efficient use of equity. However, the equity ratio remains moderate at 23.9%, suggesting a balanced asset structure.Cash Flow
Free cash flow growth was robust at 384.9%, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.49, showing a healthy conversion of income to cash. The free cash flow to net income ratio of 0.52 suggests effective cash management, although there is room for improvement in aligning cash flows with net income.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 26.23B | 25.02B | 21.59B | 12.17B | 1.91B | 5.59B |
| Gross Profit | 10.36B | 9.38B | 7.28B | 412.00M | -2.75B | -2.65B |
| EBITDA | 6.79B | 6.23B | 4.37B | -2.20B | -5.69B | -7.12B |
| Net Income | 2.64B | 1.92B | -74.00M | -6.09B | -9.50B | -10.24B |
Balance Sheet | ||||||
| Total Assets | 50.83B | 49.06B | 49.12B | 51.70B | 53.34B | 53.59B |
| Cash, Cash Equivalents and Short-Term Investments | 1.76B | 1.21B | 2.42B | 4.03B | 9.14B | 9.51B |
| Total Debt | 27.86B | 28.88B | 31.89B | 35.88B | 34.61B | 28.38B |
| Total Liabilities | 38.90B | 39.81B | 42.24B | 44.64B | 41.20B | 33.04B |
| Stockholders Equity | 11.93B | 9.25B | 6.88B | 7.06B | 12.14B | 20.55B |
Cash Flow | ||||||
| Free Cash Flow | 2.91B | 1.30B | 997.00M | -6.61B | -7.72B | -9.92B |
| Operating Cash Flow | 5.61B | 5.92B | 4.28B | -1.67B | -4.11B | -6.30B |
| Investing Cash Flow | -2.39B | -4.54B | -2.81B | -4.77B | -3.54B | -3.24B |
| Financing Cash Flow | -2.99B | -2.58B | -5.09B | 3.58B | 6.95B | 18.65B |
Carnival Technical Analysis
Positive
23.47
Price Trends
26.16
Positive
26.82
Positive
24.32
Positive
Market Momentum
1.71
Negative
68.90
Neutral
68.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CUK, the sentiment is Positive. The current price of 23.47 is below the 20-day moving average (MA) of 29.23, below the 50-day MA of 26.16, and below the 200-day MA of 24.32, indicating a bullish trend. The MACD of 1.71 indicates Negative momentum. The RSI at 68.90 is Neutral, neither overbought nor oversold. The STOCH value of 68.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CUK.
Carnival Risk Analysis
Carnival disclosed 19 risk factors in its most recent earnings report. Carnival reported the most risks in the "Finance & Corporate" 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $41.61B | 15.85 | 25.64% | ― | 6.39% | 39.66% | |
77 Outperform | $41.58B | 15.71 | 25.64% | ― | 6.39% | 39.66% | |
71 Outperform | $6.23B | 22.03 | 10.38% | ― | 15.77% | 86.16% | |
70 Outperform | $8.81B | 43.23 | ― | ― | 14.39% | 31.64% | |
70 Outperform | $2.25B | 31.38 | 13.53% | 0.79% | 7.27% | 45.12% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
54 Neutral | $396.39M | -4.94 | ― | ― | -3.55% | -111.90% |
* Consumer Cyclical Sector Average
CUK
Carnival
31.41
9.75
45.01%
CCL
Carnival
31.69
7.80
32.65%
PLNT
Planet Fitness
105.76
4.21
4.15%
OSW
OneSpaWorld Holdings
22.07
3.42
18.34%
XPOF
Xponential Fitness
8.13
-6.87
-45.80%
LTH
Life Time Group Holdings
28.25
4.20
17.46%
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.