Carnival Stock Trading at a Discount: Is it Time to Climb Aboard?

Carnival Corporation & plc CCL is currently trading at a discount relative to its industry, with its forward 12-month price-to-earnings (P/E) ratio sitting below its five-year average, as shown below. It currently has a Value Score of A.Carnival is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 11.90X, well below the Zacks Leisure and Recreation Services industry average of 18.11X. The valuation reflects a discount to the broader sector. By comparison, industry peers, including Royal Caribbean Cruises Ltd. RCL, Norwegian Cruise Line Holdings Ltd. NCLH, and OneSpaWorld Holdings Limited OSW, have a forward P/E of 16.18X, 8.44X and 18.89X, respectively.Image Source: Zacks Investment ResearchIn terms of Carnival’s share price performance, its shares have declined 5.4% so far this year. Meanwhile, among its peers, Royal Caribbean has gained 15.2%, while Norwegian Cruise and OneSpaWorld Holdings have declined 27.4% and 2.7%, respectively, during the same time frame. The Zacks Leisure and Recreation Services industry has lost 1.8%, while the Zacks Consumer Discretionary sector has gained 5.8% year to date.Carnival YTD Share Price PerformanceImage Source: Zacks Investment ResearchLet’s analyze CCL’s fundamentals to determine if the stock warrants an investment at this stage.Carnival’s Growth DriversCarnival continues to capitalize on strong demand, entering 2025 with less available inventory and securing higher pricing on first-quarter bookings compared with the previous year. The company’s strategic yield management approach has driven record-high cumulative advance bookings, with pricing at historical peaks for each quarter and occupancy levels aligning with last year’s records. Additionally, bookings in 2026 and beyond have reached an all-time high, reflecting sustained consumer interest across North America and Europe. With a booking curve extending further than ever before, Carnival remains well-positioned for long-term growth.A major differentiator for CCL is its focus on exclusive cruise destinations. The company owns and operates sought-after private islands like Half Moon Cay and the soon-to-open Celebration Key. These proprietary locations enable Carnival to offer more curated and premium guest experiences, giving the company stronger pricing power and helping to set it apart from both competitors and land-based vacation alternatives.Carnival has also taken meaningful steps to streamline its operations through fleet modernization. By phasing out older, less efficient ships and replacing them with newer, more technologically advanced vessels, the company has improved energy efficiency and expanded onboard revenue opportunities. These changes have lowered its overall cost structure while enhancing returns on invested capital, positioning the company for long-term profitability.Another key driver is Carnival’s land-based operations, particularly in Alaska, where it owns lodges and tour assets that complement its cruise offerings. This integration allows Carnival to offer unique land-and-sea vacation packages that are especially appealing to new-to-cruise customers. Coupled with a focus on brand visibility and disciplined capacity management, with only a limited number of new ships on the horizon, CCL is maintaining strategic control over growth while working to improve yields and free cash flow.Earnings Estimates Trend & Growth Rate for CarnivalOver the past 60 days, the Zacks Consensus Estimate for Carnival’s fiscal 2025 earnings per share (EPS) has been revised upward, increasing from $1.85 to $1.87 over the past 60 days. This upward trend reflects strong analyst confidence in the stock’s near-term prospects. Image Source: Zacks Investment ResearchThe company is likely to report solid earnings, with projections indicating a 31.7% jump in fiscal 2025. Conversely, industry players like Royal Caribbean, Norwegian Cruise and OneSpaWorld are likely to witness growth of 30.7%, 12.1% and 16.5% year over year, respectively, in 2025 earnings.Analysts Maintain Bullish Outlook on Carnival StockAnalysts remain constructive on Carnival, forecasting meaningful upside despite recent market volatility. Based on short-term projections from 24 analysts, the average price target for Carnival stock stands at $28.21, representing a potential upside of 19.7% from its last closing price of $23.57. Target estimates range from a low of $21.00 (implying a downside risk of 10.9%) to a high of $34.00, suggesting a sizable upside potential of 44.3%.Broker sentiment toward CCL remains firmly positive. The company holds an average brokerage recommendation (ABR) of 1.58 on a scale of 1 (Strong Buy) to 5 (Strong Sell), reflecting a favorable outlook. The consensus rating is derived from 26 firms, 18 of which have issued Strong Buy recommendations, while one rates it a Buy. The persistently strong analyst support and a wide range of price targets — weighted toward the upside — highlight optimism surrounding Carnival’s recovery trajectory and long-term potential.How to Play CCL Stock Now?Carnival’s current valuation presents an attractive opportunity for investors looking to capitalize on a travel rebound. The company’s strong booking momentum, improved pricing power, and strategic investments in fleet modernization and destination exclusivity are reinforcing its long-term competitive edge. With advance bookings at record highs and a disciplined approach to growth, Carnival is well-positioned to deliver sustained earnings improvements.Analysts remain optimistic, with consensus price targets implying meaningful upside from current levels. The bullish broker sentiment further supports a positive outlook. Given these factors, investors may consider initiating or adding to positions at current levels.Carnival currently has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report 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 ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks