Goldman Sachs reiterates Buy rating on Carnival stock, cites demand growth

Published 15/07/2025, 11:54
Goldman Sachs reiterates Buy rating on Carnival stock, cites demand growth

Investing.com - Goldman Sachs has reiterated its Buy rating and $33.00 price target on Carnival Corporation (NYSE:CCL) following investor meetings with company executives on Monday. The target represents a potential 13% upside from the current price of $29.32, with InvestingPro data showing the stock has already delivered an impressive 60% return over the past year.

The investment bank hosted meetings in New York with Carnival CEO Josh Weinstein and SVP of Investor Relations Beth Roberts, highlighting three key points from their discussions.

Goldman Sachs noted that Carnival sees sustainable, structural demand growth in cruise travel driven by a pricing advantage over land-based alternatives, high service levels, and increasing consumer awareness.

While management did not discuss specific intra-quarter trends, the company reportedly continues to experience strong demand with tight supply/demand dynamics, with executives indicating that new ships are not necessary to drive demand due to private island developments and ship refurbishments.

Goldman Sachs also reported that Carnival views investment grade metrics as the key benchmark for capital returns, after which the company believes it can simultaneously continue deleveraging and return capital to shareholders, while noting that inorganic mergers and acquisitions are not being considered.

In other recent news, Carnival Corporation & plc has been active in the financial markets with several significant offerings. The company has priced a $3 billion senior unsecured notes offering, set to mature in 2032, with plans to use the proceeds to repay existing borrowings and redeem other notes due in 2027. Additionally, Carnival closed a €1.0 billion offering of 4.125% senior unsecured notes due 2031, aimed at reducing debt and managing its maturity profile. Another $2 billion senior unsecured notes offering has been launched, with similar intentions to repay borrowings and redeem existing notes. UBS has raised its price target for Carnival to $33, maintaining a Buy rating, citing potential catalysts such as tax risk clearance and yield growth. The investment firm also anticipates Carnival will re-initiate a dividend in 2026 and announce new long-term targets in the second quarter of that year. These financial maneuvers reflect Carnival’s ongoing strategy to deleverage and optimize its capital structure.

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