Carnival Corp. (CCL) shares took a tumble in early trading on Tuesday, despite the company reporting impressive third-quarter earnings. The Miami-based cruise giant released its results amidst an exciting earnings season, leaving investors with a mixed bag of emotions. While the company exceeded expectations on both the top and bottom lines, analysts expressed some reservations regarding the future trajectory of the stock.
Here’s a breakdown of key analyst takeaways:
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Truist Securities:
Analyst Patrick Scholes maintained a Hold rating on Carnival, reiterating a price target of $20. While acknowledging the strong quarterly results, including adjusted earnings of $1.27 per share surpassing consensus, Scholes pointed out that ticket revenue slightly missed projections. He expressed concern about the fourth-quarter guidance, suggesting it may not be as robust as the third quarter.*
Morgan Stanley:
Analyst Jamie Rollo kept an Underweight rating on Carnival, though he increased the price target from $15.00 to $16.50. Rollo pointed to the company’s projection of net revenue yields of 5.0% for the fourth quarter, falling short of expectations. Despite a favorable booking environment, he emphasized the company’s asset-heavy model, making it more susceptible to potential slowdowns.*
Stifel:
Analyst Steven M. Wieczynski remained optimistic, reaffirming a Buy rating and a price target of $27. He lauded the strong earnings beat and positive forward commentary, highlighting the conservative nature of the revised guidance. While acknowledging concerns about pricing erosion and elevated costs in 2025, Wieczynski expressed confidence in Carnival’s strong bookings and potential for substantial earnings in that year.*
JPMorgan Chase:
Analyst Matthew Boss reiterated an Overweight rating on the stock, highlighting the earnings beat for the third quarter with strong growth across both revenue and profits. He praised the company’s high-margin growth and a solid foundation for 2025. Boss noted the significant increase in both ticket prices and onboard spending, further reinforcing the company’s positive momentum.Despite the positive aspects highlighted by analysts, the cautious outlook for the fourth quarter and concerns about future pricing and costs appear to have weighed on the stock. As of publication on Tuesday, Carnival shares had fallen by 3.2% to $17.90.
It remains to be seen how Carnival will navigate the challenges ahead, but the company’s strong recent performance and optimistic outlook for 2025 offer some hope for investors.
