Despite an 82% rise in 2023, Carnival (NYSE:CCL) Corp., the world's largest cruise line, continues to hold the attention of Wall Street professionals. After peaking with a 143% year-to-date gain over the summer, the stock has since pulled back, creating a potential opportunity for investors.
This Thursday, the company demonstrated its resilience by maintaining healthy fares amid fears of a slowdown in leisure demand. Susquehanna's recent analyst note highlighted that while weaknesses may be present in other areas of the leisure travel market such as theme parks and low-cost airlines, the cruise sector remains robust. The firm maintains its bullish rating on the NYSE:CCL stock with a $17 price target.
Earlier this week, Barclays issued an analyst update, reducing its price target from $22 to $21 but retaining its overweight rating on the stock. The firm anticipates strong fiscal third-quarter results despite potential pressures from recent fuel price increases and currency fluctuations on fourth-quarter guidance. Barclays also expects robust demand and bookings for Carnival.
Last week, C. Patrick Scholes at Truist upgraded the stock from sell to hold, despite showing more interest in Carnival's smaller competitors. Scholes has a positive outlook for the market next year, especially in Europe, and increased his price target from $16 to $17.
In another bullish upgrade last week, Redburn raised Carnival's stock from neutral to buy with a $23 price target. The firm observed that cruise holidays continue to offer value compared to traditional hotel vacations when measured against pre-pandemic pricing.
These analyst updates coincided with a recent 25% correction since Carnival's summertime high. However, all eyes are now on Carnival's upcoming fiscal third-quarter results due next week.
The company has shown strong momentum with active customer deposits and bookings for future sailings reaching new peaks in the latest quarter. The third-quarter results are expected to demonstrate Carnival's first profit after 14 consecutive quarterly deficits. The company's financial position has also been strengthened by recent financing strategies that have cut its annualized interest expense exposure.
Despite being a leading player in the global leisure sea travel sector and thus susceptible to fluctuations in the global economy, the consensus is that the forthcoming financial update will be positive.
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