Carnival Has Analysts Going Wild: Here's Why

Key Points

• Carnival shares have been ripping higher since they reported Q3 earnings. 
• The stock has just broken through a key resistance level and looks likely to continue gaining. 
• Several analysts are bullish on the rally, with some targeting additional gains of 40%.  

On a day when the benchmark S&P 500 index hit a record high, Carnival Corporation's NYSE: CCL popping 7% to its highest level in more than 2 years says a lot. As one of the hardest hit industries during the COVID pandemic, cruise lines have been closely watched in recent years to see if they can get back to pre-pandemic levels. 

So far, though they've managed some solid runs, this has proved an elusive goal, but there's an argument to be made that some cruise stocks, and Carnival in particular, have never looked more likely to do it. Let's jump in and take a look at some of the reasons behind this. 

Strong Fundamental Performance

For starters, there's the company's most recent earnings report, which came out just two weeks ago. Off the bat, Carnival absolutely crushed it. The company's top-line revenue figure was up more than 15% on the year and well ahead of expectations. It was one of their highest quarterly revenue prints ever and keeps the company on track to close out the year with its highest-ever turnover. 

Carnival's bottom line EPS also came in hot and was 10% higher than the consensus, which helped drive operating income to a record $2.2 billion. For context, this was a 34% gain on the same quarter last year, a jump investors would be more used to seeing with some of the big-name tech titans. 

But this is exactly what makes the report so impressive and Carnival's prospects so bullish. As CEO Josh Weinstein summed up, "We are poised to deliver record operating performance for the full year 2024, with adjusted EBITDA now expected to cross $6 billion." In addition, consistent and impressive demand enabled management to boost their full-year yield guidance for the third time in 2024. Meanwhile, Weinstein remains exceedingly bullish on Carnival's abilities to drive this momentum through 2025 and, indeed, into 2026. 

Bullish Price Action

Carnival shares had rallied close to 40% heading into the report's release, and the fact they actually sold off a little into the start of October suggests some investors were happy to take some profits off the table. But understandably, given the strength of the report, this lasted only a handful of days before the dip was snapped up, and Carnival shares haven't looked back since. 

The past week alone has seen them jump close to 20%, putting them at their highest level since April 2022 and a full 220% from their post-pandemic lows. And what is the best news for those of our readers considering a position? There are plenty of more gains to come. 

This is according to several of the heavyweight analysts, many of whom, in the past week, have been calling for further gains in the region of 40%, from where Carnival shares closed on Wednesday. Take Mizuho, Barclays, or Macquarie, for example. All 3 have reiterated their Buy rating on Carnival shares this month alone and boosted price targets of $26. There are also the updates from the teams at Tigress Financial and Citigroup, who were taking a similar stance earlier this week, although this time with price targets of $28. 

Getting Involved 

Considering Carnival shares closed out last night's session around the $20 mark, that's pointing to a targeted upside of at least 40% from current levels. If Carnival made its way up towards that level in the coming weeks, it would put them within touching distance of their post-pandemic high around the $31 mark. 

While it's true they were turned back from that level quite easily before and didn't manage to test it again, the stock's technical structure is, this time, a lot more attractive. Carnival shares have been setting higher lows for the past 2 years and, with this week's pop, have just broken through what was a major area of resistance at $20. Based on both their fundamental performance and the bullish outlook from the analysts, it's hard not to see them continue cruising north from here.