Carnival Stock Is Falling Thursday: What's Driving The Action?

Core Viewpoint - Carnival stock is experiencing selling pressure primarily due to rising oil prices, which significantly impact the company's profit margins and earnings potential in the upcoming quarters [2][4]. Group 1: Oil Price Impact - Energy costs are one of Carnival's largest variable expenses, and sustained increases in crude oil prices directly squeeze profit margins [2]. - Benchmark Brent crude has risen above $71 per barrel, while WTI is in the mid-$60s, leading to increased operational costs for Carnival [3]. - Higher fuel bills compress operating margins and reduce free cash flow, which is critical for servicing Carnival's substantial debt [4]. Group 2: Market Sentiment and Stock Performance - Investors are sensitive to macroeconomic headwinds and discretionary spending risks, leading to lower earnings multiples for travel-related stocks, which can exacerbate the impact of oil price shocks on Carnival's share price [5]. - Carnival stock is currently trading 2.3% above its 20-day simple moving average and 10.1% above its 100-day simple moving average, indicating longer-term strength [6]. - Over the past 12 months, shares have increased by 22.17% and are near their 52-week highs, with a neutral RSI of 56.82 and a bullish MACD signal [6][7]. Group 3: Upcoming Earnings and Analyst Consensus - Carnival Corporation is scheduled to release its next financial update on March 20 [8]. - The stock carries a Buy Rating with an average price target of $35.95, with recent analyst actions indicating a range of price targets from $34.00 to $38.00 [9][10]. - EPS estimates have increased to 18 cents from 13 cents, and revenue estimates have risen to $6.12 billion from $5.81 billion [9].