Analysts retool Carnival stock price targets ahead of earnings

Josh Weinstein has said it sooner than and he'll say it again.

The president and CEO of Carnival (CCL) became talking to analysts in June after the arena's largest cruise company reported 2d-quarter earnings.

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Carnival posted record revenue, operating profit and booking levels for the quarter and Weinstein desired to guarantee that each person saw the gigantic picture.

"You're going to want heard me say this sooner than," he said in the course of the company's earnings call. "This seriously is simply not from now on pent-up demand; it is some distance the compounding effect of constructing increased consideration in our cruise brands over time and improvement in our yield management techniques to translate that demand into higher ticket prices."

"And it is some distance in the same fashion evidence of the strength of our consumer," he added. "Encouragingly, we're enjoying consistent growth in both repeat guests and new guests, with each segment up 10% this quarter over last year."

A 20-year veteran of the company, Weinstein took over the very best executive spot in August 2022 after playing an extremely important role in planning Carnival’s response to the Covid-19-19 pandemic, which bludgeoned the cruise ship industry.

"We have significantly stepped up where we were sooner than the pandemic to where we are normally," Weinstein told analysts.

The cruise ship industry normally appears to be doing well as of late.

Carnival CEO: 'We're hitting records on top of records'

An estimated 35.7 million people will embark on a cruise by year-end, in step with the Cruise Lines International Association. In 2023 some 31.7 million people took cruises, which is double (107%) the cruise volumes in 2019, a prepandemic year.

The association said the cruise industry became expected to grow to nearly forty million passengers by 2027, or roughly the overall population of Canada.

Related: Carnival Cruise Line shares key question about cruise ports

Carnival owns cruise ship brands including Carnival Cruise Line, Princess Cruises, Holland The U. S. Line, Seabourn, Costa Cruises, AIDA Cruises and Cunard.

The company will sunset the P&O Cruises Australia brand in March 2025 and fold the Australia operations into Carnival Cruise Line.

"Of course, we are in a position to still retain our leading presence the total way at some stage in the Australian market, carrying over 60% of all Aussie cruisers," Weinstein said. "It truly is a fine marketplace for us, specifically since the Australian summer coincides with the Northern Hemisphere iciness, enabling our seasonal ships to capitalize on two summer periods."

And for its 2026/27 season Carnival Cruise Line has opened bookings for a kind of of most up-to-date cruises so that you may perhaps additionally be capable to also sail from popular U.S. ports on both the East and West Coasts.

Carnival posted adjusted earnings of eleven cents per share for the quarter, swinging from a loss of 31 cents a share a year earlier and beating Wall Side road’s call for a loss of 1 cent per share.

Revenue increased 17.7% to a 2d-quarter record of $5.78 billion and topping analysts’ forecast of $5.Sixty eight billion.

"We're hitting records on top of previous records, which clearly tells us the strength and demand now we have got got been building is continuous into next year and beyond," Weinstein said.

Carnival raised its 2024 adjusted net income guidance by $275 million to $1.55 billion, when put next with analysts' forecasts of $1.37 billion.

The company guided analysts to 1/3-quarter adjusted net income up 35% to $1.fifty eight billion, when put next with their consensus forecast of $1.Fifty four billion.

Analyst: 'Carnival still top % in leisure group'

Analysts are anticipating 1/3-quarter profit to enlarge 29% to $1.eleven per share, while sales are forecast to climb Thirteen% to $7.Seventy 5 billion.

Carnival shares are up 2.four% year-to-date and nearly 26% from a year earlier.

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The company is scheduled to report 1/3-quarter results on Sept. 30 and analysts adjusted their price targets for Carnival's stock.

On Sept. 20 Stifel analyst Steven Wieczynski raised the investment firm's price target on Carnival to $27 from $25 and affirmed a buy rating on the shares, in step with The Fly.

The analyst said that he expected Carnival to be positioned to lift its full-year guidance again when it reports earnings.

The shares have rallied recently and likely already incorporate a beat-and-raise quarter, but Stifel still sees upside and "wouldn't be surprised to appear next year's EPS finally find yourself with a two take care of when it is all said and done," Wieczynski added.

Mizuho analyst Ben Chaiken raised the firm's price target on Carnival to $25 from $22, while maintaining an outperform rating on the shares.

The analyst said Carnival continued to be its top % the total way at some stage in the leisure group. Chaiken sees upside from lower fuel prices as the company has no hedges and upside from currency moves.

"Amidst the Covid-19 shutdown, CCL sold roughly 20% of its lower-margin fleet, which we believe sets the stage for stronger than expected operating leverage now that CCL is at full occupancy," Chaiken said.

The analyst also sees upside to Carnival's core underlying trends from strong yield growth and making improvements to operating leverage. The shares offer a compelling free cash float and deleveraging opportunity, he added.

"In October, CCL is holding an Investor Day that will per chance provide a possibility for the company to present insight into where they stand relative to their longer-term Ebitda/profitability goals," Chaiken said.

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