On Monday, Carnival Corporation (NYSE:CCL) received a reaffirmation of its Buy rating and a $23.00 stock price target from Goldman Sachs, following a third-quarter earnings report that exceeded market expectations. The cruise operator reported an adjusted EBITDA of $2.8 billion, surpassing both Goldman Sachs and consensus estimates of approximately $2.7 billion and the company's own guidance of around $2.66 billion.
Carnival's adjusted earnings per share (EPS) of $1.27 also beat estimates, with Goldman Sachs and consensus figures previously set at $1.15 and $1.16, respectively, and well above the company's guidance of $1.15. The company's constant currency net yields were higher than forecasted at 8.7%, compared to Goldman Sachs' estimate of around 8.1%. Moreover, net cruise costs excluding fuel showed a year-over-year decrease of 0.4% (-0.3% in constant currency), a significant improvement over the anticipated increase of approximately 4.5%.
Looking ahead, Carnival has adjusted its full-year 2024 outlook, with projected EBITDA now at about $6 billion, up from the previous estimate of $5.83 billion. The EPS forecast has also been raised to $1.33 from $1.18. The company's net yield for the full year is expected to increase to 10.4% on a constant currency basis, a slight adjustment from 10.25%, which aligns with or is slightly below what analysts had predicted for the fourth quarter.
The company's forward-looking statements were particularly positive, noting that nearly half of 2025 bookings are at higher prices compared to the previous year, and 2026 is off to a strong start with record booking volumes in the past three months. This upbeat commentary on future performance may contribute to investor optimism regarding Carnival's growth trajectory.
In other recent news, Carnival Corporation has been the subject of various analyst updates. BofA Securities reiterated a Buy rating on Carnival shares, citing stable demand trends and slight tailwinds from fuel and currency. The firm has adjusted its 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) and earnings per share (EPS) estimates for Carnival upward.
Stifel increased its price target for Carnival shares to $27.00, anticipating a potential raise in their full-year guidance during their upcoming earnings report. Mizuho Securities also raised its price target on Carnival to $25.00, reflecting optimism about the company's financial performance and growth prospects.
Carnival Corporation recently reported record Q2 earnings, surpassing its guidance with a $170 million bottom-line outperformance, driven by a 12% increase in yields. This led to record revenues, operating income, and all-time highs in customer deposits and booking levels. The company's outlook is positive, with an 8% yield guidance for Q3 and improved full-year net income guidance by $275 million due to increased yields and cost savings.
The company has announced the expansion of its fleet with three new liquefied natural gas (LNG)-powered ships, scheduled for delivery in 2029, 2031, and 2033. The agreement with Italian shipbuilder Fincantieri will result in the construction of the largest ships in the Carnival Corporation global fleet, each boasting nearly 230,000 gross registered tonnes.
Carnival is also in the process of strategic brand consolidation, with plans to sunset P&O Cruises Australia and integrate it into Carnival Cruise Line. Moreover, Carnival Corporation is developing a new destination, Celebration Key, expected to launch in 2025, which is anticipated to contribute to revenue and fuel efficiency. These are recent developments indicating Carnival Corporation's continued growth and improved returns.
InvestingPro Insights
Carnival Corporation's strong performance and optimistic outlook are further supported by real-time data from InvestingPro. The company's revenue growth of 34.02% over the last twelve months as of Q2 2024 aligns with the impressive earnings report highlighted in the article. This growth is complemented by a robust EBITDA growth of 310.04% over the same period, reflecting Carnival's successful recovery and operational efficiency improvements.
InvestingPro Tips indicate that Carnival is trading at a low P/E ratio relative to its near-term earnings growth, with a PEG ratio of just 0.2. This suggests that the stock may be undervalued considering its growth prospects, which is consistent with Goldman Sachs' Buy rating and price target. Moreover, the tip that net income is expected to grow this year supports the company's raised full-year 2024 outlook mentioned in the article.
For investors seeking more comprehensive analysis, InvestingPro offers 7 additional tips for Carnival Corporation, providing a deeper understanding of the company's financial health and market position.
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