Carnival Corporation (CCL) shares are experiencing a surge on Wednesday, fueled by a positive outlook for the cruise industry. This upward trend follows Citigroup’s upgrade of Norwegian Cruise Line Holdings Ltd. (NCLH) from Neutral to Buy, accompanied by a price target increase from $20 to $30. The investment bank also placed Royal Caribbean Cruises Ltd. (RCL) on a ’90 day positive catalyst’ watch, anticipating a potential upward movement in the stock price leading up to its third-quarter earnings release on October 29.
Citigroup’s analyst, James Hardiman, cited the recent rally in the cruise sector as a key driver for his bullish stance. He believes this upward momentum will extend beyond 2025, benefiting the entire industry. This optimistic view aligns with the broader sentiment surrounding the cruise industry’s recovery, which has been steadily gaining traction in recent months.
Adding to the positive backdrop, oil prices have been trending downward this week, offering a reprieve for cruise lines that are heavily reliant on fuel. However, Carnival has had to adjust some sailings and itineraries due to Hurricane Milton, which is expected to make landfall on Florida’s west coast on Wednesday night. Despite these temporary disruptions, the overall sentiment remains optimistic.
Analysts are generally bullish on Carnival’s prospects, with an average 12-month price target of $23.45. The highest price target currently stands at $28, while the lowest sits at $15. Out of the analysts covering Carnival, seven have positive ratings, one maintains a neutral stance, and two have negative ratings. Notably, seven analysts have adjusted their price targets in the last month, reflecting the dynamic nature of the stock’s performance.
While stock prices can fluctuate, the average annual return for the stock market is roughly 10%. With Carnival’s shares up 17.44% year-to-date, the average analyst price target suggests that the stock may have further upside potential in the coming months. This positive outlook, combined with the bullish sentiment surrounding the cruise industry, makes Carnival Corporation an intriguing prospect for investors seeking exposure to this burgeoning sector.
