Wells Fargo Initiates Carnival (CCL) Coverage with ‘Overweight’ Rating, $37 PT, Cites Attractive Cruise Sector Outlook

Group 1: Company Overview - Carnival Corporation (NYSE: CCL) is a cruise company providing leisure travel services across North America, Australia, Europe, and internationally, operating through four segments: NAA Cruise Operations, Europe Cruise Operations, Cruise Support, and Tour & Other [4] Group 2: Financial Performance - In Q3 2025, Carnival Corporation reported a record adjusted net income of $2 billion, exceeding pre-pandemic levels by approximately 10%, resulting in an EPS of $1.43, which beat Street expectations by $0.11 [2][3] - The total revenue for the quarter was $8.15 billion, reflecting a modest year-over-year increase of 3.25%, with yields increasing by 4.6% on a same-ship basis due to strong demand and high onboard spending [3] - The company's return on invested capital (ROIC) reached 13% for the trailing 12 months, and Carnival raised its full-year guidance for the third time this year, now expecting net income of approximately $2.9 billion or $2.14 per share [3] Group 3: Analyst Ratings and Market Outlook - Wells Fargo analyst Trey Bowers initiated coverage of Carnival with an Overweight rating and a price target of $37, citing the cruise sector as the most attractive area within gaming, leisure, and lodging [1] - The firm anticipates a rapid improvement in ROIC for both individual cruise companies and the industry as a whole, with expectations for continued growth in the total addressable market (TAM) for cruises [1]