CCL Stock Rises 34% in 3 Months: Should You Act Now or Hold Steady?

Shares of Carnival Corporation & plc CCL have rallied 34% in the past three months compared with the Zacks Leisure and Recreation Services industry’s 16.3% growth. Over the same timeframe, the stock has outperformed the S&P 500’s growth of 10.2%.Carnival’s performance has been fueled by resilient consumer demand and supportive macroeconomic trends. Despite persistent uncertainty, leisure travel has remained a priority for households, with higher-income consumers driving premium experiences. This has translated into strong advance bookings and favorable pricing across the fleet, reinforcing the company’s revenue trajectory.At the same time, a more favorable cost backdrop is aiding the recovery. The U.S. Travel Price Index shows travel-related expenses such as hotels and gas trending lower year over year, improving affordability for consumers and supporting discretionary spend. These dynamics are likely to have supported CCL with the easing of operating pressures while sustaining demand at attractive price points.CCL’s 3-Month Price PerformanceImage Source: Zacks Investment ResearchAs of yesterday, Carnival stock is trading 4.6% below its 52-week high of $31.01 (attained on July 23, 2025). So, should investors pour more capital into CCL now? Let us take a closer look.Key Drivers of Carnival’s PerformanceCarnival continues to benefit from strong consumer demand, with pricing strength and onboard spending driving record results. In the second quarter of fiscal 2025, yields rose nearly 6.5% year over year, surpassing guidance by 200 basis points. Both ticket sales and onboard revenues outperformed expectations, supported by strong close-in demand. Customer deposits also reached all-time highs, reflecting confidence in the company’s brands and offerings despite global volatility.While existing demand has fueled near-term growth, Carnival is strategically expanding its destination portfolio. Celebration Key has already generated premium pricing and is among the most searched cruise destinations. Enhancements at RelaxAway, Half Moon Cay and Isla Tropicale are designed to elevate guest experiences and capture share from land-based vacations. Together, these destinations form the “Paradise Collection,” boosting Carnival’s prospects in securing repeat and first-time guests.Carnival’s bookings remain robust, with 2025 positioned at historically high pricing and occupancy levels. Carnival’s extended booking window, paired with targeted marketing campaigns, has boosted visibility and conversion across North America and Europe. Demand for its brands continues to outpace capacity, enabling the company to optimize pricing while attracting a broader base of travelers. Importantly, onboard engagement continues to accelerate, contributing to revenue growth.Cost discipline and balance sheet progress have reinforced Carnival’s profitability. In the fiscal second quarter, unit costs came in 200 basis points better than guidance, while EBITDA margins reached the highest levels in nearly two decades. The company has exceeded its 2026 SEA Change targets, with EBITDA per ALBD up 52% from 2023 and ROIC surpassing 12.5%. Debt reduction efforts also remain on track, with the net debt-to-EBITDA ratio improving to 3.7. These achievements underscore Carnival’s ability to deliver sustainable value creation while maintaining operational flexibility.Earnings Estimates for CCL Move UpwardOver the past 60 days, the Zacks Consensus Estimate for Carnival’s fiscal 2025 EPS has been revised upward, increasing from $1.88 to $2.00. This upward trend reflects strong analyst confidence in the stock’s near-term prospects. CCL Earnings Estimate TrendImage Source: Zacks Investment ResearchThe 60-day earnings estimate growth trend for CCL remains higher for 2025 compared with other industry players, including Royal Caribbean Cruises Ltd. RCL, Norwegian Cruise Line Holdings Ltd. NCLH and OneSpaWorld Holdings Limited OSW. Over the past 60 days, earnings estimates for 2025 for RCL, NCLH and OSW have increased 1.2%, 0.5% and 2% respectively, in the same time frame.CCL’s Concerns: Rising Costs & Geopolitical RisksCarnival is expected to face near-term cost pressures. In the third quarter of fiscal 2025, cruise costs, excluding fuel, are projected to rise 7% year over year, driven by Celebration Key’s launch expenses, higher advertising spend and reduced capacity. One-time benefits in 2024 are also likely to create tougher comparisons, which could weigh on operating leverage in the short term. Sustaining margin gains as new projects ramp up is likely to be an ongoing challenge.Geopolitical uncertainty remains a notable risk factor. The recent conflict in the Middle East briefly disrupted booking momentum, with April showing softer demand before recovering in subsequent months. Although Carnival’s direct exposure to the region is limited, potential itinerary changes for ships scheduled to operate near Dubai in late 2025 and early 2026 highlight the vulnerability of global cruise operations to external shocks. Such developments can dampen consumer sentiment and create near-term volatility, even when underlying demand fundamentals remain strong.Additionally, the rollout of Carnival’s new loyalty program in 2026 will temporarily pressure financials. Accounting treatment requires deferring a portion of ticket revenues to reflect future benefits, creating an estimated 50-basis point drag on yields in the first year. While the program is likely to strengthen customer engagement and become accretive over time, the near-term transition highlights the balancing act between investing in growth initiatives and preserving financial momentum.CCL Stock Valuation & Technical InsightsCarnival stock is currently trading at a discount. CCL is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 13.44, well below the industry average of 19.18, reflecting an attractive investment opportunity. Other industry players, such as Royal Caribbean, Norwegian Cruise and OneSpaWorld, have P/E ratios of 19.02, 10.55 and 19.77, respectively.Image Source: Zacks Investment ResearchFrom a technical perspective, CCL is currently trading above its 50-day moving average, indicating solid upward momentum and price stability. CCL Stock Trades Above 50-Day Moving AverageImage Source: Zacks Investment ResearchCCL’s Investment Verdict: Hold for NowWhile Carnival’s strong demand trends, record yields and progress on deleveraging strengthen its long-term story, near-term headwinds from rising operating costs, geopolitical risks and the upcoming loyalty program transition warrant caution. The recent rally has already priced in much of the optimism, leaving limited room for upside in the immediate term.Investors are advised to monitor Carnival's ability to sustain pricing momentum, control costs and advance its balance sheet recovery before committing new capital. We recommend waiting for a more favorable entry point. For current shareholders, holding the stock may be a prudent choice, given its potential for long-term growth. With a Zacks Rank #3 (Hold), Carnival remains a solid yet measured bet in the cruise industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>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