CCL Stock Before Q2 Earnings: Should You Buy Now or Wait for Results?

Core Insights - Carnival Corporation & plc (CCL) is set to release its second-quarter fiscal 2025 results on June 24, 2025, with an expected earnings per share (EPS) of 24 cents, indicating a growth of 118.2% from 11 cents in the same quarter last year [1][8] - The consensus estimate for fiscal second-quarter revenues is $6.21 billion, reflecting a 7.4% increase year-over-year [5][8] Earnings Estimates and Trends - The earnings estimate trend over the past 60 days shows a stable EPS estimate of 24 cents for Q2, with slight increases in future quarters [2] - CCL has a strong earnings surprise history, having outperformed the Zacks Consensus Estimate in the last four quarters with an average surprise of 458.4% [5][6] Revenue and Growth Drivers - The anticipated EPS growth is attributed to higher pricing and strong booking volumes, with onboard spending also contributing to revenue growth [8][11] - Passenger ticket revenues are expected to rise by 5.6% year-over-year to $3.96 billion, while onboard and other revenues are projected to increase by 9.3% to $2.21 billion [13] Strategic Initiatives - Carnival's performance is bolstered by strong booking trends, robust onboard spending, and strategic pricing initiatives, with over 80% of full-year capacity already booked at higher prices [12][20] - The company is focusing on optimizing its portfolio and investing in high-return opportunities, including fleet enhancements and brand positioning [14][20] Cost and Margin Considerations - Elevated costs and macroeconomic pressures may impact margins, with total operating expenses expected to rise by 7.3% year-over-year to $5.6 billion [15] - Factors such as labor inflation, fuel price volatility, and foreign exchange headwinds could negatively affect the bottom line [15][21] Stock Performance and Valuation - CCL shares have increased by 11.4% over the past three months, outperforming the industry and S&P 500 [16] - The stock is currently trading at a forward P/E multiple of 11.80X, below the industry average of 17.70X, indicating a potential valuation opportunity [19] Long-term Growth Prospects - Carnival is leveraging strong consumer demand and an optimized fleet to drive long-term growth, with strategic investments aimed at enhancing guest experiences and sustaining pricing momentum [20][22] - Record customer deposits and strong forward bookings suggest healthy demand momentum heading into the second half of 2025 [24]