Carnival Corporation & plc CCL continues to outshine, with its stock rising 16.4% in the past month, outpacing the industry’s 8.3% rise. CCL has also handily beaten the S&P 500’s modest 2.1% gain and the sector’s 2.4% increase, underscoring the stock’s strong momentum amid broader market outperformance.

As of Wednesday, the stock closed at $21, below its 52-week high of $21.80 but well above its 52-week low of $10.95. In the past month, CCL has outperformed other industry players like Royal Caribbean Cruises Ltd. RCL, Norwegian Cruise Line Holdings Ltd. NCLH and OneSpaWorld Holdings Limited’s OSW growth of 13.4%, 15.9% and 3%, respectively.

Stock Price Performance

Image Source: Zacks Investment Research

Technical indicators suggest continued strong performance for CCL. The stock is trading above its 50-day moving average, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in CCL's financial health and prospects.

50-Day Moving Average

Image Source: Zacks Investment Research

Key Drivers Boosting CCL

The company is benefiting from record booking volumes, not only for 2025 but also for 2026, reflecting sustained consumer demand. In the third quarter of fiscal 2024, the company reported strong booking momentum for fiscal 2025, with volumes remaining robust at higher prices than the prior year. Nearly half of 2025 is already booked, with less inventory available than last year. The company is leveraging this demand to achieve record ticket pricing. Occupancy and pricing for 2025 are at record levels, and nearly 50% of 2025 is already booked.

This robust booking momentum for fiscal 2024, 2025 and 2026 contributed to a record third-quarter fiscal 2024 customer deposit. Total customer deposits as of Aug. 31 were $6.8 billion compared with $8.3 billion in the previous quarter. The amount was higher than the $6.3 billion reported on Aug. 31, 2023.

Carnival is investing in fleet modernization, such as the AIDA evolution program and introducing new next-generation ships like the Sun Princess and Star Princess, both expected to drive revenues. Carnival Cruise Line is set to revolutionize its Bahamian offerings with the launch of Celebration Key in July 2025. This new destination features five activity-packed areas and will gain momentum in 2026 when 19 Carnival ships make it a premium stop.

A major factor in Carnival's success is its capability to draw market share from land-based vacations. The company has appealed to new and returning customers through targeted marketing strategies and strong collaborations with travel agents. By narrowing the perceived price difference between cruises and traditional vacations, CCL has positioned itself as a more appealing, cost-effective option for value-conscious travelers.

Then again, the company is likely to benefit from decreased interest rates. Although CCL carries substantial debt, much of which was incurred to remain afloat during the pandemic, there is potential for relief. Total debt (current and long-term) as of Aug. 31, 2024, was $28.9 billion. If Carnival can refinance a portion of this debt at more favorable rates, it could see a reduction in interest costs, boosting its financial performance.

The company is also benefiting from cost reductions, including lower inflationary pressures and better-than-expected savings on operating costs, contributing to higher profitability. This includes savings from crew travel and port costs.

CCL Trading at a Discount

Carnival is currently valued at a discount compared with its industry on a forward 12-month P/E basis. CCL’s forward 12-month price-to-earnings ratio stands at 12.89, lower than the industry’s. This indicates that despite the recent stock price increase in the past month, it remains an attractive option for investors looking for a discounted entry point.

P/E (F12M)

Image Source: Zacks Investment Research

Estimate Revision Favoring the Stock

Reflecting the positive sentiment around CCL, the Zacks Consensus Estimate for earnings per share has seen upward revisions. Over the past 30 days, analysts have increased their estimates for the current and next fiscal years by 8.3% and 7.1%, respectively.

Image Source: Zacks Investment Research

End Notes

Carnival has shown impressive stock performance in the past month, driven by strong booking volumes for 2025 and 2026, record ticket pricing, and increased customer deposits. Its fleet modernization and new offerings, such as Celebration Key, enhance revenue potential.  Cost-cutting measures and a discounted valuation compared with the industry make CCL an attractive investment option. Upward earnings estimate revisions signal continued positive momentum, suggesting investors buy the CCL stock now. The company currently flaunts a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

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 Report

To read this article on Zacks.com click here.

Zacks Investment Research