Carnival stock initiated at Overweight by Wells Fargo with $37 target

Investing.com - Wells Fargo initiated coverage on Carnival Corporation (NYSE:CCL) with an Overweight rating and a $37.00 price target on Tuesday.

The investment bank’s rating is based on a 13.5x multiple applied to its 2027 estimated earnings per share of $2.99, discounted back one year.

Wells Fargo noted that Carnival "continues to march toward an investment grade rating" as its EBITDA grows and debt is retired, highlighting the cruise operator’s ongoing financial recovery following pandemic disruptions.

The firm pointed to Carnival’s "continued cost discipline" and projected "continued solid yield growth" as key factors supporting its positive outlook on the stock.

Wells Fargo also emphasized that Carnival, similar to industry peers, is "focused on highlighting its ability to drive ROIC with limited capacity growth in the coming years that should drive strong pricing growth." This aligns with Carnival’s current return on invested capital of 9%, according to recent financial data. The company has earned the backing of analysts, with 18 having revised their earnings estimates upward for the upcoming period.

In other recent news, Carnival Corporation has reported strong third-quarter results, prompting UBS to raise its price target on the company to $35 from $33, while maintaining a Buy rating. The investment firm noted that Carnival’s Q3 performance exceeded expectations, leading to adjustments in their estimates. Meanwhile, Fitch Ratings has upgraded Carnival’s Long-Term Issuer Default Ratings to investment grade ’BBB-’ from ’BB+’, following the company’s refinancing of its 6.0% senior unsecured notes due 2029. This upgrade reflects a stable outlook for the cruise operator.

Tigress Financial Partners also increased its price target on Carnival to $40, citing record-setting profitability and a robust demand environment. The firm maintained a Buy rating, highlighting factors such as yield expansion and effective cost controls. On the other hand, Bernstein reiterated its Market Perform rating with a $26 price target, despite Carnival’s strong quarterly performance and positive booking trends for 2026 and 2027. The company has consistently exceeded expectations on net yield growth and costs throughout 2025. These developments underscore Carnival’s financial strengthening and strategic positioning in the cruise industry.

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