- Argus Research has increased its price target for Carnival Corporation (NYSE: CCL) to $35.00, indicating a potential 21.34% upside for the cruise operator’s stock.
- Despite reporting record net yields and $6.66 billion in revenues, Carnival Corporation’s stock declined due to a softer Q3 outlook, attributed to rising fuel prices and currency headwinds.
- Jefferies analysts maintain a ‘Buy’ rating, viewing these challenges as short-term and forecasting over $9 billion in free cash flow for growth and debt reduction.
An analyst at Argus Research raises the price target for cruise operator Carnival Corporation (NYSE: CCL) to $35.00 from $30.00. At the time of the update, Carnival Corporation was trading at $28.85. This new target suggests a potential upside of about 21.34% for investors, reflecting confidence in the company’s future performance and the cruise industry outlook.
This optimism comes even as Carnival Corporation’s stock recently fell after its Q2 financial results. The company reported its twelfth straight quarter of record net yields, which is the revenue per passenger after cruise costs. It also announced revenues of $6.66 billion and record customer deposits of $9 billion.
The stock’s decline was due to a Q3 market outlook that was lower than expected. Management points to a projected 30% rise in fuel prices and a $73 million currency headwind as reasons for the softer guidance. Currency headwinds occur when a stronger home currency reduces the value of foreign profits, impacting international operations.
However, analysts at Jefferies view these as short-term issues for the cruise line. As reported by Proactive Investors, they maintain a ‘Buy’ rating and a $35 price target on Carnival Corporation. Jefferies expects the company to generate over $9 billion in free cash flow between fiscal 2026 and 2027, which can be used for growth and debt reduction strategies.
During an earnings call, as highlighted by Zacks, management stated the softer outlook is from a temporary disruption in Europe, not falling demand for cruise travel. The company also notes its leverage, a measure of debt, has improved to 3.1X while it continues to invest in its fleet and destinations, showcasing strong financial management.
