Carnival Corp. CCL experienced a significant wave of investment bank analysts raising the cruise line’s year-ahead price targets on Wednesday, responding to the company’s robust earnings report and optimistic guidance for the remainder of the year.

Shares of Carnival Corp. rose 2% to $18.18 by 12:30 p.m. ET on Wednesday, eyeing the seventh straight session of gains, the longest streak since December 2023.

Goldman Sachs Raises Price Target From $22 to $23

Goldman Sachs analyst Lizzie Dove increased Carnival’s price target from $22 to $23, implying a 29% upside from Tuesday’s close.

“Bookings and pricing momentum are firing on all cylinders and accelerating into 2025.”

According to Goldman Sachs, 2024 is not a "peak cruise" year, with notable growth in new-to-cruise passengers, which saw a 10% year-over-year rise.

“The company emphasized this is not due to pent-up demand, but is a result of increased consideration in their cruise brands and improvements in yield management that translate demand into higher ticket prices,” Dove explained.

The analyst expects that concerns about consumer weakness after a slight decline in onboard spending in Q1 should now be alleviated. The investment bank raised revenue and earnings per share estimates for 2024, 2025, and 2026.

Stifel Hikes Price Target To $25

Stifel research analyst Steven M. Wieczynski highlighted Carnival’s strong performance, positive forward outlook and updated guidance, which he considers somewhat conservative.

“We believe CCL is still taking a somewhat conservative view around certain yield metrics (onboard, close-in pricing), and it would not surprise us if FY24 yields end up being 11%+,” Stifel wrote in a note.

Booking volumes for fiscal-year 2025 and beyond are at record levels, with 2025 booking rates surpassing those for 2024.

“There is nothing we can see today that would make us believe demand is slowing. Shares remain undervalued, in our view, based on significant FCF generation moving forward,” Wieczynski commented.

Stifel highlighted that shares of Carnival have declined about 4% this year, while the S&P 500, as tracked by the SPDR S&P 500 ETF Trust SPY, has increased 15%. “We believe CCL shares could be worth $28-$32,” Wieczynski added.

Stifel issued a “Buy” rating and a $25 price target on Carnival shares, which equates to 10x their 2025 EBITDA estimate and implies a 37% surge from current levels.

Truist Securities Puts Estimates Under Review

Carnival’s positive quarterly results prompted Truist Securities analyst C. Patrick Scholes to review his estimates and price target. Truist Securities currently maintains a “Neutral” rating with a $17 price target on Carnival shares.

“While not a blow-out beat and raise like we have seen from Royal Caribbean Cruise Ltd. RCL, it was still a legitimate beat and raise,” Scholes noted.

The earnings beat primarily came from revenue, both tickets and onboard, and from lower-than-expected payroll expenses.

“We believe such positive trends are the investor expectation and consistent with what we have been hearing from our various industry booking and pricing checks and from travel industry executives. That said, the company putting 2025 observations in writing for the first time is certainly a positive.”

Other Analyst Actions

Redburn Atlantic raised its price target on Carnival from $22 to $27, maintaining a “Buy” rating.
Citigroup raised its price target from $18 to $22, keeping a “Buy” rating.
Mizuho Securities raised its price target from $21 to $22.
Wells Fargo raised its price target from $23 to $24.
Deutsche Bank raised its price target from $18 to $19.