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1. Company Snapshot

1.a. Company Description

Carnival Corporation & plc operates as a leisure travel company.Its ships visit approximately 700 ports under the Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK), and Cunard brand names.The company also provides port destinations and other services, as well as owns and owns and operates hotels, lodges, glass-domed railcars, and motor coaches.


It sells its cruises primarily through travel agents, tour operators, vacation planners, and websites.The company operates in the United States, Canada, Continental Europe, the United Kingdom, Australia, New Zealand, Asia, and internationally.It operates 87 ships with 223,000 lower berths.


Carnival Corporation & plc was founded in 1972 and is headquartered in Miami, Florida.

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1.b. Last Insights on CCL

Carnival Corporation & plc faces challenges despite strong quarterly results, with investors focusing on weaker-than-expected forecasts for net yield. The company's record bookings, rising yields, and upgraded 2025 guidance signal stronger fundamentals. However, rising costs may test margins. Carnival's debt reduction and refinancing efforts are favorable, potentially paving the way for a dividend comeback. With booming bookings and premium pricing momentum, the company is well-positioned for growth, but macroeconomic risks and inflation sustain.

1.c. Company Highlights

2. Carnival's Strong Q3 Earnings: A Testament to its Post-Pandemic Recovery

Carnival Corporation & plc delivered a net income of $2 billion in Q3 2025, with earnings per share (EPS) of $1.43, beating analyst estimates of $1.32. Revenue and yields reached record highs, driven by strong close-in demand and onboard spending, with yields increasing 4.6% on a same-ship basis. The company's operating income, EBITDA, and customer deposits also achieved record levels, demonstrating its ability to navigate the post-pandemic recovery and achieve significant financial milestones.

Publication Date: Oct -02

📋 Highlights
  • Record Net Income:: Achieved $2 billion net income in Q3 2025, surpassing pre-pandemic levels by nearly 10%.
  • Yield Growth:: Same-ship yield increased 4.6%, driven by strong close-in demand and high onboard spending.
  • Cost Efficiency:: Cruise costs without fuel per ALBD improved 1.5 points better than guidance due to cost-saving initiatives.
  • ROIC Milestone:: Trailing twelve months ROIC reached 13%, the highest in nearly 20 years.
  • Deleveraging Progress:: Net debt/EBITDA reduced to 3.6x, nearing investment-grade levels, with $11B debt refinanced at favorable rates.

Operational Efficiency and Cost Savings

Carnival's cruise costs without fuel per available lower berth date (ALBD) were 1.5 points better than guidance, driven by cost-saving initiatives. The company's focus on operational efficiency has enabled it to maintain its competitive edge, despite inflationary pressures and macroeconomic uncertainty. With a Return on Invested Capital (ROIC) of 13% for the trailing twelve months, the highest in nearly two decades, Carnival is demonstrating its ability to generate accretive returns.

Deleveraging and Financial Strength

Carnival's net debt to EBITDA reduced to 3.6 times, nearing investment-grade levels. The company refinanced over $11 billion of debt at favorable rates and prepaid $1 billion, leading to a Moody's credit rating upgrade. With a strong balance sheet and a focus on deleveraging, Carnival is well-positioned to return capital to shareholders. The company's valuation metrics, including a P/E Ratio of 14.34 and an EV/EBITDA of 9.4, suggest that its strong financial performance is not yet fully reflected in its stock price.

Outlook and Growth Prospects

Carnival expects to maintain its momentum, with strong close-in demand and a potential for further yield acceleration in the fourth quarter. Despite headwinds in 2026, including a 50 basis point impact from the loyalty program reward and a 100 basis point impact from dry docks, the company expects to mitigate these challenges through operational efficiency improvements and brand-level initiatives. With a diversified portfolio and a focus on guest experience, Carnival is confident in its ability to protect pricing power and brand equity.

Valuation and Shareholder Returns

With a ROE of 26.18% and an ROIC of 10.7%, Carnival is demonstrating its ability to generate strong returns for shareholders. The company's Free Cash Flow Yield of 7.72% suggests that it has the capacity to return capital to shareholders. As Carnival approaches its target leverage ratio of 3.5 times, it is expected to prioritize shareholder returns, including dividends and buybacks. With a P/B Ratio of 3.18, the company's valuation is not yet fully reflective of its strong financial performance and growth prospects.

3. NewsRoom

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CCL's ROIC Climbs to 13%: Is a New Profitability Cycle Taking Shape?

Dec -04

Source: zacks.com

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Holland America Line Sets New U.S. Bookings Mark with Record Black Friday Weekend Sales

Dec -04

Source: prnewswire.com

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4 Discretionary Stocks to Buy on Rising Hopes of a December Rate Cut

Dec -04

Source: zacks.com

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CCL Stock Slips 19% in 3 Months: Should Investors Buy the Dip or Wait?

Dec -03

Source: zacks.com

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What's Wrong With Carnival Corp Stock?

Dec -03

Source: fool.com

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Arrowstreet Capital Limited Partnership Lowers Holdings in Carnival Corporation $CCL

Dec -03

Source: defenseworld.net

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History Says These 7 S&P 500 Stocks Often Rally In December

Dec -01

Source: feeds.benzinga.com

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Carnival (CCL) Upgraded to Buy: Here's What You Should Know

Dec -01

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.39%)

6. Segments

North America and Australia

Expected Growth: 5.5%

Carnival Corporation & plc's 5.5% growth in North America and Australia is driven by increasing demand for luxury and premium cruise experiences, particularly among baby boomers and Gen Xers. Strong brand recognition, strategic partnerships, and investments in digital marketing also contribute to growth. Additionally, the rise of short and weekend cruises, as well as the introduction of new, innovative ships, further boost demand in these regions.

Europe

Expected Growth: 5.2%

Strong demand for Mediterranean and Northern European itineraries, driven by increased consumer spending and a growing middle class, contributed to Carnival Corporation & plc's 5.2% growth in Europe. Additionally, the company's strategic investments in new ships and onboard amenities, as well as its efforts to enhance the overall customer experience, have also supported this growth.

Tour and Other

Expected Growth: 4.8%

The 4.8% growth in Tour and Other segment of Carnival Corporation & plc is driven by increasing demand for cruise travel, expansion into new markets, and strategic partnerships. Additionally, the company's efforts to enhance customer experience through digitalization and onboard amenities, as well as its focus on sustainability and environmental initiatives, contribute to the segment's growth.

Cruise Support

Expected Growth: 4.5%

Cruise Support from Carnival Corporation & plc's 4.5% growth driven by increasing demand for experiential travel, rising middle-class disposable income, and growing popularity of cruise vacations among baby boomers and Gen X. Additionally, Carnival's strategic investments in digitalization, ship refurbishments, and itinerary diversification are enhancing the customer experience, driving bookings and revenue growth.

7. Detailed Products

Carnival Cruise Line

Carnival Cruise Line is a global cruise line that operates a fleet of over 25 ships, offering a range of itineraries to the Caribbean, Bahamas, Mexico, Alaska, and Europe.

Princess Cruises

Princess Cruises is a premium cruise line that operates a fleet of 19 ships, offering luxurious amenities and itineraries to destinations around the world.

Holland America Line

Holland America Line is a premium cruise line that operates a fleet of 14 ships, offering mid-size ship experiences to destinations in the Caribbean, Alaska, Europe, and beyond.

Seabourn Cruise Line

Seabourn Cruise Line is an ultra-luxury cruise line that operates a fleet of 5 intimate ships, offering all-inclusive, boutique-hotel style experiences to destinations around the world.

P&O Cruises (Australia)

P&O Cruises (Australia) is a leading cruise line in Australia, operating a fleet of 3 ships, offering short and long cruises to destinations in Australia, New Zealand, and the South Pacific.

Costa Cruises

Costa Cruises is a European-based cruise line that operates a fleet of 12 ships, offering Mediterranean-inspired cruises to destinations in Europe, the Caribbean, and South America.

AIDA Cruises

AIDA Cruises is a German-based cruise line that operates a fleet of 13 ships, offering a unique, laid-back cruise experience to destinations in Europe, the Caribbean, and South America.

P&O Cruises (UK)

P&O Cruises (UK) is a leading cruise line in the UK, operating a fleet of 7 ships, offering a range of itineraries to destinations in Europe, the Caribbean, and beyond.

8. Carnival Corporation & plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Carnival Corporation & plc faces moderate threat from substitutes, as customers have limited alternatives for cruise vacations. However, the rise of land-based vacations and staycations could pose a threat.

Bargaining Power Of Customers

Carnival Corporation & plc has a high bargaining power of customers, as customers have many options for cruise vacations and can easily switch to competitors.

Bargaining Power Of Suppliers

Carnival Corporation & plc has a low bargaining power of suppliers, as the company has a strong negotiating position due to its large scale of operations.

Threat Of New Entrants

Carnival Corporation & plc faces a low threat of new entrants, as the cruise industry has high barriers to entry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

Carnival Corporation & plc operates in a highly competitive industry, with intense rivalry among existing players, including Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 82.25%
Debt Cost 5.36%
Equity Weight 17.75%
Equity Cost 16.65%
WACC 7.36%
Leverage 463.40%

11. Quality Control: Carnival Corporation & plc passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Travel + Leisure

A-Score: 6.6/10

Value: 8.0

Growth: 4.7

Quality: 6.0

Yield: 7.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Expedia

A-Score: 5.3/10

Value: 4.2

Growth: 6.6

Quality: 6.9

Yield: 0.0

Momentum: 8.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Advance Auto Parts

A-Score: 4.9/10

Value: 9.0

Growth: 1.6

Quality: 4.4

Yield: 4.0

Momentum: 9.0

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Carnival

A-Score: 4.6/10

Value: 5.3

Growth: 4.7

Quality: 5.1

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Norwegian Cruise Line

A-Score: 4.2/10

Value: 6.0

Growth: 5.0

Quality: 4.5

Yield: 0.0

Momentum: 5.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Tripadvisor

A-Score: 4.0/10

Value: 5.2

Growth: 4.2

Quality: 5.7

Yield: 0.0

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

25.86$

Current Price

25.86$

Potential

-0.00%

Expected Cash-Flows