Carnival (NYSE:CCL) Shares Gap Up - Here's Why

Key Points

• Carnival shares gapped higher, opening at $23.19 versus a previous close of $22.31, as investors anticipated potentially strong quarterly results.
• Analysts expect approximately $1.35 in EPS and $8.4 billion in revenue, supported by improving fuel efficiency, cost controls and favorable earnings indicators. The stock trades at about 10 times forward earnings, below its historical average.
• Despite a broadly bullish “Moderate Buy” analyst consensus and an average $34.47 price target, Carnival remains below key moving averages and near its one-year low, signaling continued technical weakness ahead of the September 29 earnings release.

Carnival Corporation (NYSE:CCL - Get Free Report)'s stock price gapped up before the market opened on Tuesday . The stock had previously closed at $22.31, but opened at $23.19. Carnival shares last traded at $22.8640, with a volume of 6,845,231 shares changing hands.

Carnival News Summary

Here are the key news stories impacting Carnival this week:

• Positive Sentiment: Analysts expect Carnival to potentially exceed quarterly earnings estimates, supported by favorable earnings-related indicators. A consensus forecast calls for approximately $1.35 in EPS and $8.4 billion in revenue. Carnival Expected to Beat Earnings Estimates
• Positive Sentiment: Value investors view CCL as inexpensive ahead of the report: its forward price-to-earnings ratio is about 10 times, below its roughly 13-times two-year average. Carnival Looks Cheap to Value Investors
• Positive Sentiment: Fuel-efficiency improvements and tighter cost controls could provide a lasting margin benefit, helping offset higher fuel costs and geopolitical uncertainty. Carnival Fuel Efficiency and Margin Improvement
• Positive Sentiment: Holland America Line, a Carnival brand, is upgrading Half Moon Cay with a new beach club, food pavilion, refreshed bars and upgraded cabanas. The enhancements could improve the guest experience across more than two dozen Caribbean itineraries, although the direct near-term financial effect is unclear. Holland America Line Half Moon Cay Improvements
• Neutral Sentiment: Wall Street remains broadly bullish ahead of the September 29 earnings release, although some analysts have reduced their price targets. Carnival Analyst Forecast Changes
• Negative Sentiment: Despite the potential earnings beat and valuation appeal, CCL’s position below its key moving averages and near its one-year low signals continued technical weakness. Investors may also remain cautious until Carnival confirms results and forward guidance.

Analyst Upgrades and Downgrades

CCL has been the subject of several recent research reports. Truist Financial boosted their target price on shares of Carnival from $29.00 to $31.00 and gave the stock a "hold" rating in a research report on Thursday, July 23rd. Stifel Nicolaus cut their price target on Carnival from $37.00 to $35.00 and set a "buy" rating for the company in a report on Wednesday, September 16th. Melius Research set a $36.00 price objective on Carnival in a report on Wednesday, June 17th. BMO Capital Markets began coverage on Carnival in a research report on Tuesday, July 7th. They issued a "market perform" rating and a $30.00 price target on the stock. Finally, TD Cowen cut their price objective on Carnival from $34.00 to $32.00 and set a "buy" rating for the company in a research report on Tuesday. One analyst has rated the stock with a Strong Buy rating, eighteen have given a Buy rating and six have given a Hold rating to the stock. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and an average price target of $34.47.

Carnival Stock Performance

The company has a debt-to-equity ratio of 1.80, a quick ratio of 0.29 and a current ratio of 0.33. The firm has a market cap of $30.84 billion, a P/E ratio of 10.12, a PEG ratio of 0.95 and a beta of 2.31. The stock's 50-day moving average is $25.73 and its 200 day moving average is $26.49.

Carnival (NYSE:CCL - Get Free Report) last posted its quarterly earnings data on Tuesday, June 23rd. The company reported $0.41 EPS for the quarter, beating the consensus estimate of $0.34 by $0.07. Carnival had a net margin of 11.24% and a return on equity of 26.11%. The business had revenue of $6.66 billion for the quarter, compared to analysts' expectations of $6.69 billion. During the same period in the previous year, the firm posted $0.35 EPS. The firm's revenue was up 5.3% compared to the same quarter last year. On average, research analysts predict that Carnival Corporation will post 2.21 earnings per share for the current year.

Carnival Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Friday, August 28th. Shareholders of record on Friday, August 7th were given a dividend of $0.15 per share. The ex-dividend date was Friday, August 7th. This represents a $0.60 annualized dividend and a yield of 2.7%. Carnival's dividend payout ratio (DPR) is 27.03%.

Institutional Investors Weigh In On Carnival

Hedge funds and other institutional investors have recently modified their holdings of the company. Manning & Napier Advisors LLC acquired a new position in Carnival during the second quarter worth about $25,000. Lloyd Advisory Services LLC. bought a new stake in Carnival in the fourth quarter valued at approximately $26,000. Axiom Investment Management LLC bought a new stake in shares of Carnival in the 2nd quarter valued at $29,000. Ancora Advisors LLC acquired a new stake in Carnival during the 2nd quarter worth about $29,000. Finally, Basecamp Wealth Advisors LLC grew its stake in Carnival by 107.8% during the first quarter. Basecamp Wealth Advisors LLC now owns 1,045 shares of the company's stock worth $27,000 after purchasing an additional 542 shares during the period. Institutional investors and hedge funds own 67.19% of the company's stock.

About Carnival

Carnival Corporation & plc is a global leisure travel company that operates cruise lines and related vacation businesses. Its cruise brands serve travelers in North America, Europe, Australia, and other international markets, offering ocean voyages to destinations throughout the Caribbean, Europe, Alaska, Asia, Australia, and other regions.

The company's brand portfolio includes Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, Cunard, Costa Cruises, AIDA Cruises, P&O Cruises, and P&O Cruises Australia.

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