Carnival Stock Price (NYSE: CCL) Adds 12% In 2 Sessions – Upside Analyst Forecasts Help To Push 2024 Highs

Carnival's stock price (NYSE: CCL) has gained almost 12% in two post earnings trading sessions, as the print has set markets and analysts scrambling for new targets. The stock has now hit YTD highs, with bullish sentiment clearly building.

JP Morgan, Citi, Deutsche Bank, Wells Fargo, and Macquarie have all released revised CCL forecasts, and each of them move to the upside. Below are the updated analyst price targets, along with the previous level in brackets.

• Wells Fargo – $24 ($23). Noted cruise demand remaining strong in North American and European markets.
• Macquarie – $25 ($24). Noted solid demand, and quarter.
• Deutsche Bank – $19 ($18). Sees Carnival continuing to beat and raise through 2024.
• Citi – $22 ($18). “Enduring price power” in latest phase for the industry.
• JP Morgan – $23 ($21). Expects positivity to continue at least into the next quarter.

The swathe of upside revisions comes as Carnival reported a monumental leap in its financial performance for the second quarter of 2024, with net income seeing a substantial rise, approaching a $500 million increase when compared to the figures of the previous year. This achievement underpins a significant recovery and growth phase for the cruise line operator, hinting at a stronger post-pandemic hold within the leisure industry.

In a remarkable show of operational success, Carnival PLC notched a second quarter operating income of $560 million—a striking fivefold increment from the previous year's results. This was bolstered by unrivalled revenues reaching $5.8 billion, setting a new benchmark for the company. Such financial prowess demonstrates Carnival’s ability to capitalise on the increasing consumer demand for travel and leisure activities as global economies continue to stabilise and expand.

Heightening its market expectations, the company has upgraded its full-year 2024 net yield guidance to approximately 10.25% in light of robust ongoing demand. This has led Carnival to augment its projection for the full-year adjusted net income by around $275 million. The second quarter performance alone brought in a net income of $92 million with an adjusted net income reaching $134 million. The adjusted earnings per share (EPS) of $0.11 triumphed over the March guidance by a noteworthy $170 million margin.

The financial strength is also mirrored in the record-setting adjusted EBITDA which soared over 75% compared to the previous year, standing at an impressive $1.2 billion for the quarter. Carnival's favourable tide extends into the future, evidenced by record booking volumes for 2025 sailings. Furthermore, the cumulative advanced booked position for the full year 2025 surpasses that of 2024 in both price and occupancy levels.

For the full year 2024, the company envisages net yields to surpass the previous year by 10.25% with an expected adjusted EBITDA of approximately $5.83 billion, which suggests a nearly 40% upsurge from 2023.

In strategic corporate manoeuvres, Carnival will sunset the P&O Cruises (Australia) brand by March 2025. Integrating its operations into the Carnival Cruise Line promises to optimise the global brand portfolio, indicating a methodical approach to market presence and efficiency.

Proactive financial management remains a cornerstone of Carnival's sustainable growth strategy. The company has taken decisive steps by prepaying $1.6 billion of its first-priority senior secured term loans and repricing approximately $2.75 billion of its senior secured term loan facilities since February 29, 2024. These moves reflect a conscientious effort to fortify the company’s balance sheet and reduce financing costs.

Carnival's CEO, Josh Weinstein, has attributed much of the company's success to its revitalised commercial operations, growth planning, and the resilience of its global team. Emphasising these foundational aspects alludes to a robust blueprint that could potentially propel Carnival to new heights in the global leisure market post-pandemic.