Booking Position - 51% of 2026 capacity is booked, which is approximately 10% ahead of the same time last year, with a target of 10–15% ACR growth across cabin categories for 2026 [2] - 8% of 2027 capacity is booked, about 4 percentage points ahead of the same time last year [3] Operational Performance - Occupancy reached 71% in December, leading to a full-year occupancy of 72% for 2025 [4] - Average Cabin Revenue (ACR) increased by 10% compared to December 2024, resulting in a 20% increase for the full year 2025 versus 2024 [4] - Total ticket revenue for December was 15% higher than December 2024, with a total increase for 2025 versus 2024 of 22% [4]

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]

Cruise operator Carnival Corp forecast its annual profit above estimates on Friday, banking on higher ticket prices and resilient demand from affluent consumers engaging in travel and recreational exp... ...

Core Insights - The company has achieved a booking position of 72% for 2025 capacity, which is approximately 96% of the full-year targeted occupancy [2] - For 2026, 47% of capacity is booked, which is about 8% ahead of the same time last year, with a target of 10-15% growth in Average Cabin Revenue (ACR) across cabin categories [1] - The occupancy rate reached 68%, and ACR increased by more than 15% compared to November 2024 [2] - Total ticket revenue remained consistent with November of the previous year, while ACR is currently 20% above the same time last year for the full year [2] Booking Position - As of now, 72% of the 2025 capacity is booked, indicating strong demand and effective sales strategies [2] - For 2026, the company is targeting a 10-15% growth in ACR, which supports continued revenue growth and EBITDA margin expansion [1] Revenue Performance - ACR has shown significant improvement, increasing by over 15% compared to the previous year [2] - The total ticket revenue aligns with the previous year's performance, indicating stability in revenue generation [2]

Core Viewpoint - Carnival Corp. is experiencing a business recovery post-pandemic, with a focus on regaining lost value and exploring new revenue opportunities through private island developments [2][6]. Financial Performance - Third-quarter revenue increased by 3.3% to $8.15 billion, driven by modest ticket and onboard sales growth [3][6]. - Operating income rose by 4.2% year over year to $2.27 billion in the third quarter, indicating progress in profitability [6]. Debt Management - As of the third quarter, Carnival's long-term debt was $25 billion, with cash reserves of $1.76 billion, leading to a third-quarter interest expense of $317 million [8]. - The company has been actively refinancing its debt to extend maturities, benefiting from falling interest rates [8]. Growth Initiatives - Carnival plans to enhance growth through new experiences like Celebration Key, a private island in the Bahamas, expecting 3 million guests by 2026, which would represent about 25% of its total passenger volume based on 2024 estimates [4][5]. - Another development, RelaxAway, Half Moon Cay, is set to open in mid-2026, aiming to provide a refined guest experience [5]. Investment Considerations - Despite the recovery and manageable debt, Carnival's high enterprise value of $60 billion raises concerns about its valuation, especially given its vulnerability to economic downturns and low growth rates [10].

Core Insights - Norwegian Cruise Line Holdings Ltd. (NCLH) is experiencing a significant increase in consumer demand, leading to record booking trends and advanced ticket sales reaching $4 billion in Q2 2025 [1][7]. Booking and Pricing Trends - The company reported a year-over-year net yield growth of 3.1% in Q2, with underlying ticket prices increasing by 5.1%. Pricing growth has been consistent throughout 2025, averaging 4-4.5% per quarter [2][7]. - NCLH maintains a strategy of prioritizing price over load factors, focusing on long-term brand equity [2]. Future Outlook - For Q3 2025, management anticipates a net yield growth of 1.5% on top of last year's 8.7% increase, with projected occupancy around 105.5% [3][7]. - The company is well-positioned for 2026, benefiting from itinerary redeployments and new destination investments [3]. Financial Performance - NCLH's net leverage stands at 5.3x EBITDA, making robust demand and pricing discipline essential for margin expansion and balance sheet improvement [4]. - The company targets earnings per share (EPS) of $2.45-$2.50 in 2026, nearly tripling 2023 levels, highlighting the resilience of the cruise sector [4]. Stock Performance and Valuation - NCLH shares have increased by 29.6% over the past three months, outperforming the industry average growth of 7.8% [5]. - The stock is currently trading at a forward P/E multiple of 10.24, significantly below the industry average of 18.60 [9]. Earnings Estimates - The Zacks Consensus Estimate for NCLH's 2025 EPS has been revised upward from $2.04 to $2.06, indicating strong analyst confidence [10]. - Projections suggest a 13.2% rise in NCLH's earnings for 2025, compared to higher expected increases for competitors like Royal Caribbean and Carnival [12].

Core Insights - The company reported an occupancy rate of 83% in August, marking a 5 percentage point increase compared to the previous year [2] - Average Cabin Revenue (ACR) saw an approximate increase of 15% compared to August 2024 [2] - Total ticket revenue grew by nearly 15% year-over-year, although this growth was partially offset by one fewer roundtrip operated this year [2] - As of now, 68% of the 2025 capacity is booked, which represents about 91% of the full-year targeted cabin nights [2] - ACR is currently over 20% higher than the same time last year for the full year [2] - For 2026, 31% of capacity is already booked, with ACR more than 10% higher than the same time last year for 2025 [2] - Forward bookings indicate continued revenue growth and EBITDA margin expansion into 2026 [2]

Core Insights - Carnival Corporation & plc (CCL) reported strong second-quarter fiscal 2025 results, with adjusted earnings and revenues exceeding expectations and showing year-over-year growth [1][4] - The company achieved its 2026 SEA Change financial targets 18 months ahead of schedule, indicating operational efficiency and strategic growth [2] - CCL aims to maintain high-margin revenue growth and robust profitability through favorable booking positions [3] Financial Performance - Adjusted earnings per share (EPS) for Q2 were 35 cents, surpassing the Zacks Consensus Estimate of 24 cents by 45.8%, compared to 11 cents in the same quarter last year [4] - Revenues for the quarter reached $6.33 billion, exceeding the consensus estimate of $6.21 billion by 2% and increasing by 9.5% year over year [4] - Adjusted net income for the quarter was $470 million, a significant increase of 250.7% from $134 million year over year, driven by higher ticket prices and onboard spending [6] Revenue Breakdown - Passenger ticket revenues amounted to $4.1 billion, up from $3.75 billion in the prior-year quarter, exceeding estimates of $3.96 billion [4] - Onboard and other revenues increased to $2.22 billion from $2.03 billion year over year, aligning closely with estimates [5] Balance Sheet and Liquidity - As of May 31, 2025, cash and cash equivalents were $2.15 billion, up from $1.21 billion as of November 30, 2024, with total liquidity at $5.17 billion [7] - Total debt as of May 31 was $27.3 billion, slightly down from $27.48 billion as of November 30, 2024 [7] Booking and Future Outlook - CCL reported strong advance bookings for 2025 and 2026, with record levels and historical high pricing, indicating robust demand [8][9] - For Q3 fiscal 2025, the company expects adjusted EBITDA of approximately $2.87 billion and adjusted net income of about $1.8 billion [11] - The fiscal 2025 outlook has been raised, with adjusted EBITDA now anticipated to be approximately $6.9 billion, reflecting over 10% growth year over year [12]

Operational Highlights - Occupancy in April was 69%, an increase of 4% compared to April 2024 [3] - Average Cabin Revenue (ACR) rose by nearly 30% year-over-year [3] - Total ticket revenue grew by over 20% year-over-year, despite reduced capacity due to Havila Castor being in dry-dock [3] Booking Position - As of the end of April, 60% of 2025 capacity is booked, representing about 80% of the full-year targeted cabin nights [3] - Occupancy for Q2 2025 is at 72%, compared to a final 69% in Q2 last year [3] - 21% of 2026 capacity is already booked at significantly higher average prices (ACR) than in 2025 [3] Revenue Growth and Margin Expansion - Forward bookings indicate continued revenue growth and EBITDA margin expansion into 2026 [3] - Booking distribution is more balanced across north and south routes than last year, allowing for further sales closer to departure [3] - Full year occupancy for 2025 is expected to trend higher moving forward due to Q4 campaigns starting about three months later [3]

Core Viewpoint - Carnival's stock, once a strong value investment, is recovering from pandemic-related setbacks, with revenue exceeding pre-pandemic levels and strong demand for cruises [1][3]. Financial Performance - Carnival's revenue has reached all-time highs, with adjusted net income of $174 million in the first quarter of fiscal 2025, surpassing guidance [3]. - The company has seen robust demand, with ticket sales at high prices and strong onboard spending [3]. Debt Situation - The company incurred significant debt of $27 billion to maintain operations during the pandemic, which continues to impact its financials [4]. - Carnival has been actively paying down debt, having reduced it by $0.5 billion in the first quarter and over $3 billion in 2024 [6]. Future Outlook - As interest rates decline, Carnival has been able to negotiate better terms on its debt, refinancing $5.5 billion in the first quarter, leading to annualized savings of $145 million [5]. - If the company continues its current pace of debt repayment, it could return to pre-pandemic debt levels in five years, positioning itself for potential stock price appreciation [6].