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On Wednesday, Tigress Financial Partners updated its outlook on Carnival Corporation (NYSE:CCL) shares, raising the price target to $32.00 and maintaining a Buy rating. This aligns with the broader analyst consensus, as InvestingPro data shows analyst targets ranging from $14 to $34, with 9 analysts recently revising their earnings estimates upward. The firm’s decision comes in the wake of Carnival’s record first-quarter results for 2025, which were bolstered by robust booking volumes. Carnival’s cumulative advanced bookings for the rest of 2025 are on par with the previous year’s record levels, with pricing at historical highs. Bookings for 2026 and beyond have also reached unprecedented levels.
Carnival reported a 7.47% increase in Q1 2025 revenue, hitting a first-quarter record of $5.8 billion. This performance contributes to the company’s impressive 12.66% revenue growth over the last twelve months, reaching $25.43 billion. Ticket revenue rose by 5.5% year-over-year to $3.83 billion, while onboard and other revenues saw an 11.1% year-over-year increase to $2 billion. The company maintains a healthy gross profit margin of 54%, according to InvestingPro data. The cruise operator’s performance in Europe remains strong, and the upcoming launch of Celebration Key is expected to be a significant development for Carnival and the cruise industry.
S&P has upgraded Carnival’s credit rating to BB+ as the company continues to strengthen its balance sheet and reduce debt. In the first quarter, Carnival refinanced $5.5 billion, which is projected to lower annual interest costs by $145 million and reduce debt by $500 million. Additionally, Holland America Line, a Carnival subsidiary, has announced a $70 million multi-year expansion plan to enhance its Denali Lodge and Alaska cruise tours, further solidifying its leadership in wildlife experiences.
Carnival’s ongoing fleet expansion and land-based property development are anticipated to be key growth drivers in the latter half of the year and beyond. The company is also expected to achieve its Sea Change 2026 targets a year ahead of schedule, propelled by strong demand, pricing, and yields. With a current P/E ratio of 11.91 and market capitalization of $27.78 billion, investors seeking deeper insights into Carnival’s valuation and growth prospects can access comprehensive analysis through InvestingPro’s detailed research reports, which offer expert analysis on over 1,400 US stocks. Tigress Financial Partners believes that Carnival’s continued revenue and cash flow growth, coupled with debt reduction and operational efficiencies, will significantly increase the Return on Capital, grow Economic Profit, and create substantial shareholder value. The firm asserts that the shares have a significant upside, with the new 12-month price target representing a potential return of over 50% from current levels.
In other recent news, Carnival Corporation’s credit rating was upgraded by S&P Global Ratings to ’BB+’ due to the company’s strong first-quarter performance and positive revenue outlook for fiscal 2025. The company has secured over 80% of its 2025 inventory at higher prices compared to 2024, and S&P anticipates revenue and EBITDA growth, supported by recent refinancing activities. These refinancings are expected to reduce interest expenses, saving approximately $135 million annually, and improve the company’s debt metrics. Stifel recently raised its price target for Carnival’s stock to $31, maintaining a Buy rating, citing strong booking and onboard revenue despite a mixed environment in the travel and leisure industry. Similarly, Mizuho (NYSE:MFG) Securities increased its price target to $33, following Carnival’s first-quarter results that exceeded expectations, with EBITDA surpassing guidance by $165 million. Bernstein, however, retained a Market Perform rating with a $26 target, noting Carnival’s cost challenges despite strong demand. Analysts from these firms highlight the resilience of Carnival’s business model and its ability to navigate current market uncertainties. These developments reflect ongoing confidence in Carnival’s financial performance and strategic positioning within the industry.
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