Core Viewpoint - The cruise industry is recovering post-pandemic, with Royal Caribbean positioned for growth while Carnival is focused on stabilizing its finances [1][2]. Royal Caribbean - Royal Caribbean is experiencing strong demand, with bookings extending into 2027, and is expanding its fleet with new Icon-class ships aimed at luxury travelers [3]. - The company has reduced its net debt from a pandemic peak of $22 billion to $18.3 billion, improving its credit profile to a BBB- rating from Fitch [4]. - Royal Caribbean's EBITDA margin stands at 42% in Q2 2025, and it trades at a forward P/E ratio of approximately 20x, above its pre-pandemic average of 14x, indicating investor confidence in its growth potential [5]. Carnival - Carnival is working on reducing its pandemic-era debt, targeting a net debt reduction of $8 billion by the end of 2025, but still carries over $25 billion in net debt, rated BB+ by Fitch [6]. - The company's focus is on operational stabilization rather than growth, with a forward P/E ratio of about 13x and an EBITDA margin of 24%, reflecting a slower recovery compared to competitors [7]. - Carnival's stock price is currently around $29, significantly below its pre-COVID range of $50 to $60, suggesting potential for long-term upside if its turnaround strategy is successful [13]. Investment Considerations - Royal Caribbean is recommended for investors seeking growth, with a current price of $311 and a 12-month target near $347, indicating a potential 10% upside [12]. - Carnival may appeal to contrarian investors, offering a discounted valuation and potential for significant long-term rewards if management successfully executes its turnaround strategy [13].

Industry Focus - The study identifies cruise ship casinos with the highest luck factor [1] Source - The information originates from a new study [1]

Group 1 - Carnival Corporation is the world's largest cruise company and is currently seen as a potential investment opportunity due to its recovery from pandemic-related challenges [1] - The travel industry, including Carnival, experienced significant setbacks during the pandemic, leading to a need for strategic financial maneuvers [1] Group 2 - The company raised capital during the pandemic to navigate through financial difficulties, indicating proactive management in response to industry challenges [1]

Business Performance - Norwegian Cruise Line Holdings experienced a stock surge following earnings, indicating positive market reaction [1][2] - The company faced a challenging April due to tariff announcements and macro uncertainties [2][3] - Booking pace and consumer demand have been strong, with record months in May, June, and July [3] Market Trends and Consumer Behavior - There's a shift in consumer demand towards shorter and closer-to-home itineraries [6] - The Caribbean is gaining popularity as a destination compared to Europe [5] - Cruising is considered a good value, approximately 30% less expensive than a typical hotel stay [9] Growth and Investment - The cruise industry's growth is limited to 5% per year due to shipyard capacity [12] - Norwegian Cruise Line Holdings has 13 ships on order over the next 10-11 years, representing about 4% annual growth [11][12] - Investments are being made in destinations like Great Stirrup Cay, including water parks and adult-only beach clubs, to enhance the customer experience [5][6][7]

Core Viewpoint - Caesars Entertainment, Inc. (CZR) reported second-quarter 2025 results with earnings missing estimates while revenues exceeded expectations, showing a year-over-year increase in top line but a decline in bottom line [1][3]. Financial Performance - The company recorded an adjusted loss per share of 39 cents, missing the Zacks Consensus Estimate of earnings of 7 cents, compared to an adjusted break-even in the prior-year quarter [3][8]. - Net revenues reached $2.9 billion, surpassing the consensus mark of $2.88 billion by 1.1% and increasing 2.7% year over year [3]. Segment Performance - **Las Vegas Segment**: Net revenues were $1.05 billion, down 4.3% from $1.10 billion in the prior-year quarter, with adjusted EBITDA decreasing to $469 million from $514 million [4]. - **Regional Segment**: Quarterly net revenues increased to $1.44 billion, up 3.6% year over year from $1.39 billion, while adjusted EBITDA fell to $439 million from $469 million [4]. - **Caesars Digital**: This segment saw net revenues rise 24.3% to $343 million from $276 million, with adjusted EBITDA increasing to $80 million from $40 million [5]. - **Managed and Branded Segment**: Net revenues were $74 million, up 5.7% year over year from $68 million, with adjusted EBITDA remaining flat at $17 million [5]. - **Corporate and Other**: Net revenues were $1 million compared to negative $2 million a year ago, with adjusted EBITDA at negative $50 million, worsening from negative $40 million in the prior-year quarter [6]. Balance Sheet - As of June 30, 2025, cash and cash equivalents stood at $982 million, an increase from $866 million as of December 31, 2024 [7]. - Net debt decreased slightly to $11.29 billion from $11.43 billion as of December 31, 2024 [7].

Group 1: Carnival - Carnival's shares have surged 18% year to date, outperforming the S&P 500's 8% return, indicating strong demand for travel [3][4] - The company has achieved eight consecutive quarters of record revenue, with a projected revenue of $25 billion for 2025 and adjusted earnings per share of $2.00 [4][6] - The cruise industry has shown resilience post-pandemic, with 82% of previous cruisers planning to cruise again, supporting Carnival's growth [5] - Management has noted strong demand for bookings extending into 2026, which is driving higher ticket prices and boosting margins [6][7] - Analysts forecast Carnival's earnings to grow at an annualized rate of 21%, supported by a conservative forward price-to-earnings multiple of 15 [7] Group 2: Toast - Toast has seen a 33% increase in stock price year to date, capitalizing on the digital transformation in the restaurant industry [8] - The company added over 6,000 net locations in Q1, resulting in a 25% year-over-year increase and a 31% rise in annualized recurring revenue [10] - Strong revenue growth is improving margins, particularly in high-margin areas like subscriptions and payment solutions, with recurring gross profit growing 37% year over year in Q1 [10] - ToastIQ, an AI feature, is enhancing the platform's capabilities by pulling insights from millions of transactions, creating a competitive advantage through network effects [11] - The stock is being recognized as a sustainable, high-growth software company, targeting a large addressable market of approximately 875,000 restaurants in the U.S. [12]

Core Viewpoint - Carnival has shown significant recovery and growth post-COVID-19, with strong financial performance and a positive outlook for the future, despite some economic uncertainties [1][4][11]. Financial Performance - Carnival's revenue dropped to $1.9 billion in fiscal 2021 but rebounded to $25 billion in fiscal 2024, marking a 13-fold increase [5]. - The company reported an 8.6% top-line gain in Q2 2025, achieving a record sales figure for that quarter [5]. - Operating income reached $934 million in Q2 2025, a stark contrast to the $1.5 billion operating loss in Q2 2021 [8]. Market Position and Growth Potential - The cruise industry is attracting younger travelers and first-time cruisers, which could lead to long-term customer loyalty [7]. - Spending on cruises constitutes less than 3% of the global travel industry, indicating significant growth potential [7]. - Wall Street forecasts a compound annual growth rate of 22.2% for Carnival's earnings per share from fiscal 2024 to fiscal 2027 [9]. Debt Management - Carnival's current debt stands at $27.3 billion, with $7 billion refinanced in the current year [10]. - Upgrades from two major credit rating agencies reflect a reduction in financial risk for the company [10]. Valuation and Investment Outlook - The stock is currently valued at a price-to-earnings ratio of 16, which is a substantial discount compared to the S&P 500 index [11]. - While Carnival's shares are expected to outperform the market over the next five years, they may not deliver life-changing results in the long term [12].

Core Points - Carnival Corporation's vice president Vicky Rey has been appointed to the Champions 12.3 coalition, which aims to halve food waste and reduce food loss by 2030 as part of the UN Sustainable Development Goals [1][2] - Rey has over four decades of experience at Carnival Corporation and is recognized for building partnerships that create shared value and address local needs [2] - The company has implemented a meal donation program to distribute surplus meals to communities in Latin America, contributing to its strategy of reducing food waste by 44% per person in 2024 compared to 2019 levels [3][5] Group 1 - Vicky Rey's appointment to Champions 12.3 reflects her commitment to developing scalable solutions for food waste reduction [1][4] - The meal donation program is part of Carnival's Less Left Over strategy, which focuses on maximizing the use of safe, high-quality surplus food [3][5] - The company has surpassed its 2025 interim goal for food waste reduction a year early while maintaining high-quality dining experiences [3] Group 2 - Rey's leadership has fostered cross-sector partnerships that support effective surplus meal recovery and donation frameworks [5][6] - The Champions 12.3 coalition includes leaders from various sectors, aiming to create actionable frameworks for surplus meal donation [6] - Rey's role in the coalition will help expand the reach of these initiatives to more destinations globally [6]

Industry Performance & Trends - The Invesco Leisure and Entertainment ETF has outperformed the broader market over the last three months [1] - Cruise industry booking volumes have normalized, growing at a low to mid single-digit percentage year-over-year, compared to roughly 20% growth entering the year [5] - Consumer confidence is down, contributing to booking trends more similar to pre-COVID levels [8] - Softening is being observed in different parts of the travel trade after several years of strong results [9] Company Specific Analysis (Royal Caribbean) - Royal Caribbean stock has had a great run, outperforming in the past two years, including an 83% increase in the last three months [1][3] - Truth Securities is downgrading Royal Caribbean to "hold" due to normalization in the cruise industry and high valuations [2][5] Investment Opportunities - Norwegian Cruise Lines is considered a catch-up name and an underperformer within the cruise sector [10][11] - Hyatt Hotels is mentioned as a hotel chain that hasn't performed as well as Hilton, suggesting potential relative value [10][11] Underlying Travel Trends - Research indicates underlying travel trends have been mediocre and lethargic [10]

Core Viewpoint - Carnival Corporation's stock is experiencing a significant upward trend, driven by improved investor sentiment and a price target increase from Citigroup to $37.00 [1][2] Financial Performance - The company reported record revenues of $6.3 billion, supported by strong ticket sales and onboard spending, indicating robust pricing power [4] - Adjusted net income more than tripled year-over-year, showcasing efficient operations and strong margin expansion [4] - Customer deposits for future cruises reached a record $8.5 billion, providing visibility into future revenues and enhancing financial stability [4] Demand and Capacity - Ship occupancy reached 104%, reflecting exceptionally strong demand and maximizing revenue from available berths [5] Debt Management - Carnival is actively reducing its debt burden, having closed a $3.0 billion senior notes offering to replace high-interest debt with lower-cost alternatives [6][7] - This strategy is expected to lower annual interest payments significantly, benefiting net income and potential earnings per share [8] Credit Rating Improvement - Credit agencies S&P and Fitch upgraded Carnival's credit rating to BB+, moving closer to an investment-grade rating, which could lower borrowing costs and attract institutional investors [9][10] Growth Initiatives - Carnival is investing in high-margin projects, including the $600 million Celebration Key destination, set to open in July 2025, which will enhance revenue capture [12][13] - The upcoming Carnival Rewards loyalty program, launching in 2026, aims to increase customer retention and spending [14] Overall Investment Narrative - The investment case for Carnival has evolved from a recovery story to a growth narrative, supported by strong operational demand, financial de-risking, and clear growth catalysts [15][16]