Should You Buy, Sell or Hold CCL Stock Before the Q1 Earnings Release?

Carnival Corporation & plc CCL is scheduled to release first-quarter fiscal 2026 results on March 27.

The Zacks Consensus Estimate for CCL’s fiscal first-quarter earnings per share (EPS) is pegged at 18 cents, suggesting 38.5% growth from 13 cents reported in the prior-year quarter. The consensus mark for earnings has remained unchanged in the past 30 days.

CCL’s Earnings Estimate Trend

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The consensus mark for fiscal first-quarter revenues is pegged at $6.11 billion, indicating growth of 5.1% from the year-ago quarter’s reported figure.

Carnival has an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 160%.

CCL Earnings Surprise History

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Q1 Earnings Whispers for CCL Stock

Our proven model does not conclusively predict an earnings beat for Carnival this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat on earnings. But that's not the case here.

CCL’s Earnings ESP: Carnival has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Carnival’s Zacks Rank: The company carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

What’s in Store for CCL in Q1 Earnings?

Carnival’s first-quarter fiscal 2026 performance is expected to reflect modest yield growth, supported by sustained booking momentum and historically high pricing levels. Management has indicated that yields are projected to increase approximately 1.6% year over year, or about 2.4% on a normalized basis, despite a challenging prior-year comparison. Continued strength in close-in demand and onboard spending, along with disciplined pricing strategies, is likely to have supported revenue generation in the to-be-reported quarter.

The company’s booking position remains a key indicator of performance heading into the quarter. Carnival noted that it is approximately two-thirds booked for fiscal 2026 at historically high prices, with recent booking volumes reaching record levels for both fiscal 2026 and 2027. Customer deposits have also risen to all-time highs, reflecting strong demand visibility and sustained consumer interest. These trends, combined with ongoing management of booking curves and pricing, are expected to have aided the top line in the fiscal first quarter.

Our model estimates fiscal first-quarter passenger ticket revenues to rise 3.2% year over year to $3.95 billion. We expect onboard and other revenues to increase 6.9% year over year to $2.11 billion.

However, the operating environment in the quarter is expected to have been influenced by industry capacity dynamics, particularly in the Caribbean, where first-quarter deployment represents the highest absolute capacity level of the year. Additionally, the fiscal first quarter is likely to be affected by prior-year volatility that influenced the booking curve, resulting in a more difficult comparison base.

On the cost front, Carnival’s first-quarter margins are expected to have been pressured by elevated expense growth. Adjusted cruise costs, excluding fuel per available lower berth day (ALBD), are projected to increase approximately 5.9% year over year, reflecting the timing of expenses that are more heavily weighted toward the beginning of the fiscal year. Factors such as dry dock timing and other operational cost components are expected to have contributed to the higher cost base, thereby influencing profitability in the to-be-reported quarter.

Per our model, total operating expenses in the fiscal first quarter are anticipated to rise 1.9% year over year to $3.84 billion.

CCL’s Stock Price Performance & Valuation

Carnival shares have lost 18.6% in the past three months, underperforming the Zacks Leisure and Recreation Services industry’s decline of 11% and the S&P 500’s fall of 5.1%. The company’s peers, including Royal Caribbean Cruises Ltd. RCL and Norwegian Cruise Line Holdings Ltd. NCLH, declined 5.2% and 13.2%, respectively, while OneSpaWorld Holdings Limited OSW gained 1.1% in the same time period.

CCL Three-Month Price Performance

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From a valuation perspective, Carnival stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 10.18, well below the industry average of 15.36. Other industry players, such as Royal Caribbean, OneSpaWorld Holdings and Norwegian Cruise, have a P/E of 14.94, 18.73 and 8.38, respectively.

CCL’s P/E Ratio (Forward 12-Month) vs. Industry

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Investment Considerations for CCL Stock

Carnival is entering fiscal 2026 with strong forward booking visibility and sustained demand momentum. Management highlighted that booking volumes for fiscal 2026 and 2027 have reached record levels, with the company approximately two-thirds booked at historically high prices. Customer deposits have also reached all-time highs, while close-in demand and onboard spending have remained strong, supporting overall revenue trends. The company expects further yield improvement in fiscal 2026, driven by both ticket prices and onboard spending, reflecting continued strength in demand across its portfolio.

However, investors should remain mindful of near-term cost pressures and external variables that could impact profitability. The company has guided to higher cost growth, particularly in the fiscal first quarter, driven by expense timing, inflation and operational factors such as dry dock activity and destination investments. Industry capacity growth, especially in the Caribbean, also introduces a competitive backdrop that may influence yield progression in the near term. While Carnival is actively mitigating costs through efficiency initiatives and scale advantages, factors such as fuel price volatility, foreign exchange movements and broader macro conditions remain key variables to monitor for margin performance.

Conclusion: Hold CCL Stock for Now

Given the current setup, Carnival presents a balanced risk-reward profile heading into its first-quarter fiscal 2026 earnings release. The company continues to benefit from strong forward bookings, historically high pricing and resilient onboard demand, which support revenue visibility and reinforce confidence in its ongoing recovery trajectory. At the same time, the stock’s discounted valuation relative to the broader industry suggests that some of these positives may already be reflected in the current stock price.

However, near-term headwinds, particularly elevated cost growth and a challenging comparison base, could weigh on margin performance in the to-be-reported quarter. Industry capacity dynamics in key regions further add to the uncertainty around near-term yield progression. Additionally, the absence of a positive Earnings ESP signal limits visibility of an earnings beat.

With both positive demand trends and cost-related uncertainties in play, investors may be better served by maintaining their positions and awaiting clearer signals on margin progression and earnings consistency before taking a more decisive stance.

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Carnival Corporation (CCL): Free Stock Analysis Report

Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report

Norwegian Cruise Line Holdings Ltd. (NCLH): Free Stock Analysis Report

OneSpaWorld Holdings Limited (OSW): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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