On Tuesday, a Citi analyst maintained a Buy rating for Carnival Corporation (NYSE:CCL) with an unchanged price target of $18.00. The cruise operator reported its second-quarter Adjusted EBITDA at $1.2 billion, surpassing the consensus estimate of $1.06 billion, the analyst's projection of $1.05 billion, and the company's own guidance of around $1.05 billion.
Carnival announced an adjusted earnings per share of $0.11 for the second quarter of 2024, which was more favorable than the anticipated loss of $0.02 by analysts and the expected loss of $0.04 by Citi. The reported revenue for the quarter was $5.8 billion, which is higher than both the Street's and Citi's expectation of $5.7 billion.
The company's revenue saw a significant increase of 31% compared to $4.9 billion in the second quarter of 2023 and was 20% higher than the second quarter of 2019. According to the analyst, the earnings beat was partly due to the timing of expenses, but also because per diems exceeded expectations. Furthermore, Carnival has increased its full-year guidance more than what was anticipated in the first quarter.
In other recent news, Carnival Corporation has been making significant strides in its financial performance and strategic planning. The company recently surpassed both revenue and earnings expectations, leading investment firms Jefferies and Morgan Stanley (NYSE:MS) to maintain their ratings on the corporation. Jefferies maintains a buy rating with a $25 target, while Morgan Stanley retains an underweight rating with a $13.50 target.
Carnival has also raised its profit forecast for 2024, expecting adjusted earnings per share to reach approximately $1.18. This update comes amid strong demand for cruise vacations and robust bookings for 2025, surpassing the already high levels of 2024.
Another key development is Carnival's strategic plan to integrate P&O Cruises Australia into Carnival Cruise Line by March 2025, aiming to increase guest capacity. This move will result in the retirement of the P&O Cruises Australia brand.
Bank of America (NYSE:BAC) reported a slight decrease in pricing for ocean cruise markets, but noted that Carnival Corporation and Norwegian Cruise Line (NYSE:NCLH) Holdings saw positive pricing dynamics with increases of 5% and 4%, respectively. Despite this, major cruise operators, including Carnival, are offering discounts for summer voyages to fill cabins on older ships.
InvestingPro Insights
As Carnival Corporation (NYSE:CCL) sails past earnings expectations, the latest data from InvestingPro shows a company on the rebound. With a market capitalization of $22.19 billion, Carnival is trading at a forward P/E ratio of 39.4, suggesting that investors are optimistic about its near-term earnings growth. This aligns with the InvestingPro Tip that highlights the company's expected net income growth this year. Additionally, Carnival's revenue growth is impressive, with a 50.66% increase over the last twelve months as of Q1 2024, and a quarterly increase of 21.97% in Q1 2024.
InvestingPro Tips also indicate that Carnival is a prominent player in the Hotels, Restaurants & Leisure industry, which may be driving the positive outlook. Moreover, analysts predict the company will be profitable this year, which is corroborated by the company's positive earnings per share of $0.32 over the last twelve months. While the stock price has experienced volatility, the recent uptick in performance may present a compelling case for investors. For those considering a deeper dive into Carnival's financials, there are additional InvestingPro Tips available, and users can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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