While many are fixated on artificial intelligence (AI) stocks, few other growth stocks like Carnival Corporation (CCL) appear to be quietly defying expectations. Carnival closed 2025 with one of the strongest performances in its history, yet the stock remains widely overlooked heading into 2026. Let’s find out if Carnival stock is a good buy now. More News from Barchart www.barchart.com About Carnival Corp Carnival Corporation is the world’s largest cruise company. It owns and operates a diversified ...

Core Insights - Carnival Corporation & plc (CCL) and Norwegian Cruise Line Holdings Ltd. (NCLH) are both entering 2026 with strong demand trends and strategies that are reshaping their long-term earnings profiles [1] - Carnival has gained momentum following a strong finish to 2025, reflecting growing investor confidence in its operational turnaround [1] - Norwegian Cruise is advancing a measured, ROI-focused transformation aimed at enhancing yields and margin durability [1] Carnival Corporation (CCL) - Carnival is evolving towards a destination-led cruise model, investing in exclusive private destinations and fleet enhancements to support sustained yield growth [3] - The company reported record revenues, EBITDA, and operating income in 2025, with operating margins expanding significantly and return on invested capital rising above 13%, the highest in nearly two decades [4] - Key growth strategies include expanding its portfolio of private destinations, such as Celebration Key, which is expected to deepen customer engagement and improve itinerary economics [5] - However, unit costs are expected to rise by approximately 3.25% year-over-year in 2026 due to inflation and increased operational costs [6] Norwegian Cruise Line Holdings (NCLH) - Norwegian Cruise is executing its "Charting the Course" strategy, focusing on disciplined capacity growth and investments in high-impact destinations to support yield expansion [7] - The transformation of Great Stirrup Cay is a key initiative, with plans for new guest amenities and infrastructure to enhance load factors and yield [9] - Norwegian Cruise is increasing its exposure to the luxury market, with solid demand trends for its premium brands, Oceania Cruises and Regent Seven Seas [10] - The company is on track to deliver over $300 million in cumulative cost savings, helping to keep adjusted net cruise cost growth below inflation [11] - Elevated leverage relative to peers and sensitivity to external variables may temper near-term flexibility [12] Financial Performance and Valuation - The Zacks Consensus Estimate for Carnival's fiscal 2026 sales and EPS suggests increases of 4.1% and 9.3%, respectively, with earnings estimates rising by 2.5% in the past 60 days [13] - For Norwegian Cruise, the 2026 sales and EPS estimates suggest increases of 10.2% and 26.9%, respectively, although earnings estimates have declined by 0.4% in the past 60 days [16] - Carnival stock has gained 23.6% over the past year, outperforming the industry's rise of 5.9% and the S&P 500's growth of 19.7%, while Norwegian Cruise shares have declined by 12.9% [18] - Carnival is trading at a forward P/E ratio of 12.40, below the industry average of 17.17, while NCLH's forward P/E is at 8.39 [21] Overall Analysis - Carnival holds a modest positioning advantage over Norwegian Cruise as the industry moves into 2026, supported by stronger cash flow momentum and an expanding private-destination footprint [23] - Norwegian Cruise's yield-focused strategy and premium brand exposure offer long-term potential, but elevated leverage and sensitivity to external variables temper near-term flexibility [24] - Both companies currently carry a Zacks Rank 3 (Hold), with Carnival slightly standing out due to clearer execution trends and a business model aligned with sustaining profitability [25]

Core Insights - Carnival Corporation & plc (CCL) has demonstrated strong forward booking visibility for fiscal 2026, with approximately two-thirds of bookings already secured at historically high prices, indicating robust demand despite macroeconomic uncertainties [1][3][9] Booking and Demand - Customer deposits for CCL increased by 7% year over year, reaching an all-time high in Q4 of fiscal 2025, which serves as a strong demand indicator and enhances cash flow visibility [2][9] - The company has experienced record booking volumes for 2026 and 2027 over the past three months, extending visibility beyond the near term [1] Revenue Management - CCL has maintained disciplined revenue management and price integrity, allowing for yield growth without aggressive discounting, even as industry capacity expands [3] - Close-in demand remains strong, with higher ticket pricing and increased onboard spending contributing to improved revenue generation visibility [3][9] Competitive Positioning - Compared to peers, CCL's forward booking profile is notable for its depth and duration, suggesting a strong foundation heading into 2026 [6] - Royal Caribbean and Norwegian Cruise Line also report strong demand, but CCL's multi-year booking visibility and elevated customer deposits provide a competitive edge [4][5][6] Stock Performance and Valuation - CCL shares have increased by 8.3% over the past three months, outperforming the industry average rise of 1% [7] - The stock trades at a forward price-to-earnings ratio of 12.37, significantly lower than the industry's average of 17.31, indicating potential undervaluation [11] - The Zacks Consensus Estimate for CCL's fiscal 2026 earnings suggests a year-over-year increase of 9.3%, with EPS estimates having risen in the past 30 days [14]

Core Insights - Carnival Corporation & plc (CCL) is shifting towards a disciplined commercial execution phase, focusing on pricing integrity as part of its yield strategy [1] - The company is prioritizing revenue optimization over maximum occupancy, indicating a strategic shift from volume-driven tactics [1][4] Group 1: Revenue Strategy - CCL is entering 2026 with a significant increase in Caribbean supply, with non-Carnival industry capacity expected to rise by approximately 14%, leading to a cumulative growth of about 27% over two years [2][9] - In the fiscal fourth quarter, CCL reported a net yield increase of 5.4% year over year, surpassing prior guidance by 110 basis points, attributed to sustained demand and a more measured promotional environment [3][9] - For fiscal 2026, CCL forecasts net yields in constant currency to rise approximately 2.5% compared to 2025 levels, reflecting a focus on balancing ticket pricing, onboard spending, and guest mix [4] Group 2: Competitive Landscape - CCL's closest competitors, Royal Caribbean Cruises Ltd. (RCL) and Norwegian Cruise Line Holdings Ltd. (NCLH), are adopting different strategies, with RCL focusing on yield quality and NCLH trading pricing for volume [5][6][7] - RCL is demonstrating strong demand and pricing resilience, leveraging differentiated assets to maintain pricing power despite increased capacity [6] - NCLH is increasing short Caribbean itineraries to attract families, which is lifting load factors but diluting blended pricing due to a higher mix of third and fourth guests per cabin [7] Group 3: Market Performance - CCL shares have gained 3.8% over the past three months, outperforming the industry's rise of 0.2% [10] - The stock trades at a forward price-to-earnings ratio of 13.13, significantly below the industry's average of 17.83 [12] - The Zacks Consensus Estimate for CCL's fiscal 2026 earnings implies a year-over-year increase of 7.6%, with EPS estimates having risen in the past 60 days [14]

Core Insights - Princess Cruises celebrated the christening of its Rose Parade float, named Star Princess, with a ceremonial break of a bottle of Pantalones Organic Tequila, honoring its maritime heritage [1][2] - The float showcases the design of the newest ship, Star Princess, featuring Sphere Class architecture and is set to highlight the upcoming 2026 inaugural Alaska season [2][3] Company Overview - Princess Cruises is recognized as the 1 cruise line in Alaska, offering vivid experiences that reflect the breathtaking landscapes and wildlife of the region [3] - The company is part of Carnival Corporation & plc and is known for delivering dream vacations with elite service and a variety of activities across numerous global destinations [8] Float Details - The float measures approximately 55 feet long and 21 feet high, decorated with over 300,000 flowers and natural materials, designed to evoke the beauty of Alaska [5] - The Rose Parade attracts around 800,000 spectators along its route and over 28 million U.S. television viewers, making it a significant event for brand visibility [4]

Core Insights - Crown Princess has undergone significant enhancements following a drydock in Singapore, introducing new guest experiences such as O'Malley's Irish Pub and a redesigned Gatsby's Casino [1][5] - The ship, with a capacity of 3,080 guests and weighing 113,561 tons, aims to elevate the onboard experience and is set to sail for Australia and embark on a 114-day World Cruise [1][6] Group 1: Enhancements and Features - O'Malley's Irish Pub offers a cozy atmosphere with seating for 134 guests, serving classic pub food and a variety of beverages, including curated beer and whiskey flights [2] - Gatsby's Casino features traditional games like blackjack and roulette, with a refreshed layout and upgraded gaming equipment, enhancing guest comfort and enjoyment [3] - The EFFY Lounge showcases high-quality jewelry pieces, contributing to the ship's luxurious offerings [4] Group 2: Upcoming Itineraries - Crown Princess will arrive in Sydney on January 4, 2026, for a series of Australia cruises through May 2026 [6] - The ship will then depart on a 114-day World Cruise, roundtrip from Sydney, starting on May 10, 2026 [6] Group 3: Company Overview - Princess Cruises is recognized as a leading cruise brand, offering dream vacations to millions in sought-after destinations, with a focus on elite service and personalized experiences [8] - The company is part of Carnival Corporation & plc, which is publicly traded [8]

Core Viewpoint - Carnival (CCL) shares surged approximately 10% after the company reinstated its dividend and reported Q4 earnings that more than doubled year-over-year to $0.34 per share [1][4] Financial Performance - Q4 earnings increased to $0.34 per share, more than doubling compared to the previous year [1] - Carnival's stock has risen 89% from its year-to-date low, indicating strong recovery momentum [2] Dividend Reinstatement - The reinstatement of the dividend after a six-year suspension signals operational stability and confidence in cash flow, allowing for shareholder returns while supporting growth [3] - This decision marks a significant turning point for Carnival, moving away from pandemic-driven losses and debt restructuring [4] Future Guidance - Management provided optimistic full-year guidance, projecting net yields to increase by at least 2.5% in fiscal 2026 [1] - Analysts recommend maintaining positions in CCL shares as the consensus rating is "Strong Buy" with price targets suggesting nearly 40% upside potential [7][8] Technical Analysis - Carnival's stock is currently trading at a price-to-sales (P/S) multiple of 1.51, making it relatively cheaper compared to competitors like Royal Caribbean (RCL) [5] - The stock has surpassed its 100-day moving average, indicating bullish momentum in the near- to medium-term [6]

Financial Performance - The company reported record earnings and record yields [2] - Yields were up over 55% on top of approximately 11% the prior year [2] - Projects a normalized 3% yield increase for 2026 [3] Consumer Behavior & Market Trends - Consumers prioritize spending on significant experiences like vacations with friends and family [5] - The company enters 2026 with the highest book point aligned with last year, at higher prices [6] - Consistent customer bases exist for cruises ranging from short trips to 130-night world cruises [6] - Strong business performance is observed across contemporary, premium, and luxury segments [7] - The cruise industry offers a compelling "price to experience ratio" compared to land-based alternatives [8] - The company is improving its position in the mainstream vacation consideration set [8][9]

Financial Data and Key Metrics Changes - The company reported a net income of over $3 billion for 2025, a 60% increase from 2024, marking an all-time high [4][16] - Full-year yields improved by more than 5.5% compared to the previous year, exceeding initial guidance by almost 1.5% [4][5] - Operating margins and EBITDA margins increased by over 250 basis points year-over-year, achieving the highest operating income per ALBD in nearly 20 years [5][6] - The company achieved a return on invested capital (ROIC) exceeding 13%, the highest level in 19 years [5] Business Line Data and Key Metrics Changes - The company experienced record booking volumes for 2026 and 2027, with customer deposits up 7% year-over-year, reaching an all-time high [6][7] - The onboard revenue per diem significantly outperformed prior year levels, indicating strong demand despite lower consumer sentiment [6][7] - The company anticipates a 3% yield increase in 2026, normalizing for accounting changes and geopolitical uncertainties [7][8] Market Data and Key Metrics Changes - The company is about two-thirds booked for 2026, in line with historical highs for North America and Europe [6][8] - The Caribbean market is expected to see a 14% increase in non-Carnival Corporation capacity growth, contributing to competitive dynamics [8][12] Company Strategy and Development Direction - The company plans to resume dividends at an initial rate of $0.15 per quarter, reflecting confidence in cash generation and balance sheet improvements [9][10] - The strategy includes a focus on capital allocation to return value to shareholders while continuing to invest in new destination developments and vessel enhancement programs [10][11] - The company is transitioning its destination strategy to enhance marketability and growth potential, with new developments like Celebration Key and Isla Tropical [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of demand for cruise lines, despite macroeconomic challenges and low consumer sentiment [6][14] - The company expects another year of double-digit earnings growth on top of the 60% increase achieved in 2025 [14][15] - Management highlighted the importance of effective cost management and operational efficiencies to mitigate inflation and other cost pressures [9][10] Other Important Information - The company is recommending unification of its dual-listed company structure to streamline governance and reduce administrative costs [26] - The unification is expected to enhance liquidity for stock trades and increase the stock's weighting in major U.S. indices [26] Q&A Session Summary Question: Guidance for 2026 yield growth and close-in demand - Management indicated that the guidance for 2026 is based on current expectations and momentum, with close-in bookings expected to continue supporting performance [30][32] Question: Caribbean capacity and bookings - Management noted that for Q1, bookings are slightly better positioned compared to the previous year, with a focus on managing Caribbean capacity effectively [34][41] Question: Momentum and booking volumes into 2026 - Management confirmed strong booking volumes leading into 2026, with no irrational pricing observed, and emphasized the importance of managing the booking curve [46][48] Question: Cost management and efficiencies - Management highlighted that cost mitigation efforts are embedded in the forecast, with a focus on leveraging scale to offset inflation [50][51] Question: Caribbean demand and pricing actions - Management expressed confidence in Caribbean yields supporting business momentum, with positive expectations for 2026 [58][59]

Core Insights - The cruise operator's earnings report highlighted strong pricing and bookings trends [1] Group 1 - The company reported robust pricing strategies that have positively impacted revenue [1] - There has been a notable increase in bookings, indicating strong demand for cruise services [1]