Carnival's Valuation: Examining Recent Cooling in Share Momentum

Carnival Corporation's stock has shown clear momentum with a 65% gain over the past 12 months and more than tripling across 3 years. The recent month saw shares pull back by 5% after building steady gains earlier in the year. The prevailing narrative places Carnival's fair value above the current share price, framing it as an undervalued proposition despite recent volatility. The rollout of a new loyalty program in 2026 is expected to deepen customer engagement and retention, supporting accelerating revenue and yield growth from 2028 onward.

Carnival Corporation & plc (CCL), a leading cruise company, has demonstrated robust stock performance in recent years, with a notable 65% gain over the past 12 months and a more than tripling of its value over the last three years. Despite a 5% pullback in the recent month, the cruise giant continues to attract investor attention due to its undervalued status and promising future prospects.

Ahead of its fiscal third-quarter earnings report scheduled for Monday, September 29, analysts expect CCL to report a profit of $1.32 per share on a diluted basis, up 3.9% from $1.27 per share in the year-ago quarter Carnival Corporation's Quarterly Earnings Preview: What You Need to Know^[1]. This expectation aligns with the company's historical trend of surpassing Wall Street's EPS estimates in its last four quarterly reports. For the full year, analysts anticipate an EPS of $2.02, up 42.3% from fiscal 2024, with a projected rise of 14.9% year over year to $2.32 in fiscal 2026 Carnival Corporation's Quarterly Earnings Preview: What You Need to Know^[1].

CCL's stock has significantly outperformed the S&P 500 Index and the Consumer Discretionary Select Sector SPDR Fund over the past 52 weeks. The stock has gained 69% compared to the S&P 500's 15.4% and 18.3% gains for the Consumer Discretionary Select Sector SPDR Fund, respectively Carnival Corporation's Quarterly Earnings Preview: What You Need to Know^[1].

The cruise company is gearing up for a competitive market by advancing its fleet strategy with targeted newbuilds and upgrades. Recent successes, such as AIDAdiva's refurbishment, and upcoming launches like Carnival Festivale and Carnival Tropicale, are poised to enhance guest experiences and strengthen its market position Carnival Corporation's Quarterly Earnings Preview: What You Need to Know^[1].

The rollout of a new loyalty program in 2026 is anticipated to deepen customer engagement and retention, potentially supporting accelerating revenue and yield growth from 2028 onward. This program change will see current loyalty statuses reset, with only Diamond level members retaining their status indefinitely Want to get Carnival lifetime Diamond status? Here’s what it will cost you^[2]. For those aiming to secure Diamond status, the cost varies depending on the number of additional sailing days required, ranging from $600 to $24,000 Want to get Carnival lifetime Diamond status? Here’s what it will cost you^[2].

Analysts' consensus on CCL stock is bullish, with a "Strong Buy" rating overall. Out of 25 analysts covering the stock, 18 advise a "Strong Buy," one suggests a "Moderate Buy," and six give a "Hold." The average analyst price target of $34.39 indicates a potential upside of 12.8% from current levels Carnival Corporation's Quarterly Earnings Preview: What You Need to Know^[1].

The cruise sector's outlook remains favorable, with analysts expecting Carnival to produce stronger earnings in the coming quarters. The company's focus on debt repayment and fleet expansion positions it well for future growth. Investors should closely monitor the upcoming earnings report and the rollout of the new loyalty program for further insights into the company's trajectory.