Core Viewpoint - Carnival is experiencing strong demand and financial recovery, making its stock an attractive investment opportunity despite high debt levels [1][10]. Group 1: Demand and Revenue Growth - Carnival is the largest cruise operator globally, with record demand for its cruises, surpassing pre-pandemic sales levels [2][4]. - In Q2 of fiscal 2025, revenue increased by 8.6% year over year, with total deposits reaching a record $8.5 billion [2][4]. - Operating income nearly doubled year over year to almost $1 billion, and adjusted net income more than tripled, with EPS of $0.35 exceeding expectations [5]. Group 2: Future Investments - Carnival is investing in new ships and upgrades to maintain strong demand, with one new ship scheduled for delivery this year and four more on order for 2027 to 2032 [6][7]. - The company is launching a new resort, Celebration Key, in the Bahamas, which can accommodate two million guests annually, enhancing its offerings [8]. - Additional experiences, RelaxAway and Isla Tropicale, are set to launch next year, along with a new membership program to drive repeat business [9]. Group 3: Debt Management and Financial Stability - Carnival's total debt stands at over $27 billion, down nearly $10 billion from its peak of $32 billion at the end of 2022, with efficient debt repayment strategies [10]. - The company received upgrades from Fitch and S&P Global, now just one notch away from an investment-grade rating, indicating improved financial health [11]. - Carnival's stock trades at a forward P/E ratio of 12 and a P/S ratio of just over 1, suggesting it is undervalued [11].

Core Viewpoint - Carnival Corporation is positioned as a leading non-tech growth investment opportunity, driven by a strong recovery in the global leisure travel industry, particularly in the cruise segment [1][2][16]. Financial Performance - In Q1 2025, Carnival reported record revenues of $5.8 billion, a $400 million increase year-over-year, with net yields rising by 7.3% [3]. - Adjusted net income reached $174 million ($0.13 per diluted share), a significant improvement from the previous year's loss, and adjusted EBITDA hit a record $1.2 billion, a 38% increase [4]. - Customer deposits reached a record $7.3 billion, indicating healthy future demand [4]. Strategic Outlook - Carnival has raised its full-year 2025 guidance, projecting adjusted net income of around $2.49 billion ($1.83 per share) and adjusted EBITDA of nearly $6.7 billion, with net yield growth of about 4.7% [5]. - The company expects to meet its 2026 adjusted return on invested capital (ROIC) and adjusted EBITDA per available lower berth (ALBD) a year ahead of schedule, with a projected adjusted ROIC of about 12% for 2025 [7]. Growth Initiatives - The "SEA Change" program is a cornerstone of Carnival's strategy, focusing on sustainable long-term growth and profitability [6]. - Carnival is investing in new revenue streams, including the exclusive destination Celebration Key in Grand Bahama, set to open in July 2025, which is expected to boost ticket revenue and onboard spending [9]. - The company is modernizing its fleet and enhancing private destinations, with a disciplined approach to fleet and capacity management, projecting a modest overall capacity growth of 0.8% for fiscal year 2025 [10][11]. Stock Valuation - Carnival's shares traded around $22.25, with a market capitalization of approximately $25.9 billion, and a trailing P/E ratio of about 16.01 [13][14]. - The forward P/E ratio is approximately 12.93, and the PEG ratio is around 0.54, suggesting the stock may be undervalued relative to its expected earnings growth rate [14][15]. - Earnings per share are projected to grow substantially by around 18.08% for the next year, indicating strong growth potential [15].