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Investing.com - Goldman Sachs maintained its Buy rating and $37.00 price target on Carnival Corporation (NYSE:CCL), now valued at $38.2 billion, following the cruise operator’s third-quarter earnings report that exceeded expectations. The company’s stock has delivered an impressive 59% return over the past year, with analyst targets ranging from $26 to $43.
The cruise line reported strong third-quarter results and raised its full-year guidance, reflecting the company’s traditionally conservative approach to forecasting. With revenue reaching $26.2 billion and a healthy gross profit margin of 55%, Carnival’s performance has been robust. According to InvestingPro, seven analysts have recently revised their earnings estimates upward for the upcoming period. Despite the positive earnings, Carnival shares did not see significant gains as investors focused on unexpected cost pressures projected for 2026.
Goldman Sachs highlighted three specific cost concerns weighing on investor sentiment: a previously known 50 basis point headwind from the Celebration Key project, a newly disclosed 100 basis point impact from dry dock expenses, and challenges in keeping cost growth below inflation without capacity expansion next year.
Despite these cost concerns, the investment bank maintained its positive outlook on Carnival, noting that demand continues to strengthen with "best-in-class same ship yield growth." The firm also expects Carnival’s Celebration Key project to add nearly 2 percentage points of yield improvement in 2026.
Goldman Sachs compared Carnival’s current position to Royal Caribbean’s situation approximately 18 months ago, suggesting Carnival is approaching investment-grade metrics with potential capital returns that could attract more long-term investors to the stock. InvestingPro analysis shows the company maintains a "GREAT" overall financial health score, with particularly strong growth metrics. Discover more exclusive insights and detailed analysis in the comprehensive Pro Research Report, available along with 1,400+ other top stocks on InvestingPro.
In other recent news, Carnival Corporation has reported its third-quarter earnings for 2025, surpassing Wall Street’s expectations. The company achieved an earnings per share of $1.43, compared to the projected $1.32, delivering an 8.33% positive surprise. Carnival’s revenue reached $8.2 billion, slightly exceeding the anticipated $8.09 billion. Despite these strong financial results, the stock experienced a mixed market reaction. Additionally, Mizuho reiterated its Outperform rating on Carnival with a price target of $37.00, despite some market concerns. The research firm pointed to underestimated cost estimates for 2026 and crowded hedge fund positioning as factors influencing the stock’s performance. Concerns were also noted about pricing in the fourth quarter and fiscal year 2026. These developments highlight the complexities facing Carnival amid its financial achievements.
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