Mizuho raises Carnival stock price target to $33 from $32

On Monday, Mizuho (NYSE:MFG) Securities exhibited confidence in Carnival Corporation (NYSE:CCL) by increasing its price target to $33.00, up from the previous $32.00, while retaining an Outperform rating on the company’s shares. According to InvestingPro data, Carnival, currently valued at $25 billion with a P/E ratio of 12, appears overvalued based on its Fair Value analysis. The stock has shown significant volatility, with analyst targets ranging from $14 to $34. The upgrade comes in the wake of Carnival’s first-quarter results, which surpassed expectations and indicated a more positive outlook for the year than previously feared.

Carnival’s first-quarter yield outperformed guidance by a significant margin, coming in at 7.35% compared to the projected 4.6%. This strong performance has been carried over to the revised full-year yield guidance, which now stands at 4.7%, up from the initial 4.2%. The company’s EBITDA for the first quarter was reported at $1.21 billion, exceeding the guidance of $1.04 billion by $165 million. The company’s financial health has earned a "GREAT" rating from InvestingPro, with impressive revenue growth of 12.7% over the last twelve months. This beat has been largely factored into the updated full-year EBITDA guidance of $6.7 billion, a slight increase from the previous forecast of $6.6 billion.

Mizuho’s analysis indicates that despite a $15-20 million headwind from foreign exchange and fuel costs, Carnival’s earnings beat is even more impressive. The market had expressed concerns about the $165 million beat versus a $100 million guidance raise. However, the difference is attributed to rounding and conservatism, the sale of an asset (Sojourn), which resulted in 100,000 fewer available lower berth days (ALBDs), and higher than expected dry-dock costs due to unforeseen maintenance.

The analyst at Mizuho believes that while the volatile news flow likely had some impact on bookings, the overall outlook for Carnival is better than what was initially feared. This suggests a resilient business model capable of weathering external pressures. The company’s performance and revised guidance highlight the underlying strength of Carnival’s operations amid a challenging environment. With a gross profit margin of 54% and positive earnings yield of 8%, Carnival demonstrates strong fundamentals. For deeper insights into Carnival’s financial health and growth prospects, including additional ProTips and comprehensive analysis, check out the full research report available on InvestingPro.

In other recent news, Carnival Corporation reported impressive financial results for the first quarter of 2025. The company exceeded earnings expectations with an earnings per share of $0.13, significantly higher than the projected $0.02. Carnival’s revenue also surpassed forecasts, reaching $5.81 billion against the anticipated $5.75 billion. The company achieved record highs in revenue and EBITDA, with EBITDA increasing by nearly 40% year-over-year. Following these strong results, Carnival raised its full-year guidance by $185 million, reflecting confidence in its future performance.

Stifel analysts maintained a positive outlook on Carnival, raising the stock price target to $31 from $30 while keeping a Buy rating. They noted the market’s uncertainty around cruise stocks but highlighted Carnival’s attractive risk-reward balance. Carnival’s stock is trading at a significant discount compared to its historical average, suggesting that potential risks have been factored in by the market. The company also plans to reduce its debt by nearly $5 billion between 2025 and 2026, aiming for investment-grade leverage metrics by 2026. These developments indicate strong consumer demand and strategic financial management by Carnival Corporation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.