Should You Buy, Sell or Hold CCL Stock Before the Q4 Earnings Release?

Core Viewpoint - Carnival Corporation & plc (CCL) is set to release its fourth-quarter fiscal 2025 results on December 19, with expectations of significant earnings growth and revenue increase compared to the previous year [1][6]. Earnings Estimates - The Zacks Consensus Estimate for CCL's fiscal fourth-quarter earnings per share (EPS) is 25 cents, reflecting a 78.6% increase from 14 cents in the same quarter last year [1][6]. - The consensus revenue estimate for the fourth quarter is $6.36 billion, indicating a 7.2% growth from the prior year's figure [1][6]. Earnings Surprise History - CCL has a strong earnings surprise history, having beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 169.8% [3][4]. Revenue and Cost Trends - Passenger ticket revenues are projected to rise 5.2% year-over-year to $4.05 billion, while onboard and other revenues are expected to increase by 6.1% to $2.21 billion [9]. - Total operating expenses are anticipated to rise 5.3% year-over-year to $5.7 billion, influenced by higher variable compensation and ongoing investments in destinations and ship maintenance [11][10]. Stock Performance and Valuation - CCL shares have increased by 19.4% over the past six months, outperforming the Zacks Leisure and Recreation Services industry growth of 7.6% and the S&P 500's rise of 16.5% [12]. - The stock is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 11.68, below the industry average of 17.15, indicating a potential undervaluation [14]. Strategic Positioning - The company is benefiting from strong booking momentum, high pricing, and disciplined yield execution, with record forward bookings and elevated customer deposits [16]. - Strategic investments in destination development and fleet upgrades are expected to enhance revenue generation and shareholder value over time [16]. Conclusion on Investment - While the fundamentals appear supportive, near-term visibility is limited due to ongoing cost pressures and elevated interest expenses, suggesting potential volatility around upcoming results [20][21]. - A cautious approach is recommended, with existing investors maintaining exposure due to improving fundamentals, while new investors may consider waiting for clearer signals on cost management [22].