Is Carnival Corp A Good Buy?

🌟🌟🌟Carnival Corp $Carnival(CCL)$  share price has been on a tear in 2024 and it is continuing its strong upward momentum in 2025.    Carnival has just hit its 52 week high on Wednesday and is up 10.5% in the past 5 days.  This is pretty good considering that the markets were volatile.

Carnival is the world's largest cruise vacation company with a fleet of more than 90 ships sailing globally.  It is among the largest leisure travel companies with a portfolio of world class cruise lines such as Aida Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America, P&O Cruises, Princess Cruises and Seabourn.

Aida Cruises is the market leader in the German speaking cruise market while Carnival Cruises is a leader in contemporary cruising and operates a fleet of ships designed to provide fun and memorable vacation experiences at great value. 

Costa Cruises is the Italian cruise company par excellence with over 75 years of history while Cunard is the epitome of British refinement for travellers who relish luxury ocean travel.  Holland America's premium fleet of spacious, elegant mid sized ships feature sophisticated 5 star dining, extensive entertainment and activities, innovative culinary enrichment programs and exciting worldwide itineraries.

Princess Cruises operates a fleet of modern cruise ships, renowned for its innovative design and wide array of choices in dining, entertainment and amenities.

Seabourn provides ultra luxury cruising vacations in a unique small ship style that focuses on great service, all suite accommodations, superb cuisine and unique experiences in destinations worldwide. 

In other words Carnival caters to all types of travellers from those want ultra luxury to the those who simply want to have fun with limited budget. 

On December 20 2024, Carnival outperformed its Q4 24 guidance and reported record full year operating results.  Carnival also expects 20% earnings growth in 2025.

Full year revenues hit an all time high of USD 25 billion, that is 15% higher than the prior year, with continued strength in demand.

Full year net income was USD 1.9 billion which outperformed September guidance by over USD 130 million.

Carnival delivered record full year adjusted EBITDA of USD 6.1 billion which is 40% higher than the prior year.  Its full year operating income was USD 3.6 billion which is 80% higher than the prior year.

4th quarter revenue was USD 5.9 billion, 10% higher than prior year, delivering record adjusted EBITDA.

Carnival 's cumulative advanced booked position for full year 2025 is at an all time high for both price and occupancy.

Carnival CEO Josh Weinstein said that Carnival had an incredibly strong finish to a record year.  Revenues hit an all time high driven by strong demand environment.  This enabled Carnival to outperform its initial 2024 guidance by USD 700 million and deliver nearly USD 2 billion more to the bottom line year over year.  Progress was broad based as Carnival drove strong pricing in 2024 compared to 2023 across its major cruise lines and trades.

2025 is shaping to be another banner year with yield growth expected to far outpace historical growth rates and exceed unit cost growth.  This sets up Carnival for a fantastic 2025 and beyond while delivering great service to over 13.5 million guests in 2024.

Carnival is scheduled to announce its Q1 earnings results on Wednesday March 26.

Wall Street Analysts expect Carnival to report a profit of USD 0.02 per share, up 114.3% from a loss of USD 0.14 per share in the previous year quarter.  Carnival has consistently surpassed Wall Street 's Earnings per share in its last 4 quarterly reports.

In Q4 24, Carnival reported adjusted earnings of USD 0.14 per share, exceeding consensus estimates by 75%.  This was due to strong demand, higher pricing and improved occupancy, resulting in better than expected revenue and cost efficiencies.

For Fiscal 2025, analysts expect Carnival to report Earnings Per Share of USD 1.76, up 23.9% from USD 1.42 in Fiscal 2024.

Carnival's share price is up 68% in 2024, significantly outperforming $SPDR S&P 500 ETF Trust(SPY)$  22.5%.

Wall Street Analysts are bullish on Carnival with a Strong Buy, Average Target price of USD 30.07, an upside potential of 7% according to Tipranks.

I have invested in Carnival 6 months ago as I could see the huge upside potential then.  Carnival like all other cruise companies were badly impacted by Covid 19.  In fact Carnival reached a 52 week low of USD 13.78.  

What an amazing recovery!  Kudos must be given to its excellent management team in reviving Carnival from a loss making company to a profitable one. 

I believe that Carnival offers a better value than its main competitor $Royal Caribbean Cruises(RCL)$  as its Price to Earnings ratio is 19.41 versus RCL's price to earnings ratio of 26.10.

Carnival is off to a great start in 2025 with lots of exponential growth ahead.   With its advanced bookings numbers at all time high in both price and occupancy, it is full Steam Ahead for Carnival Corp.

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