On Monday, Stifel, a financial services company, increased its price target for Carnival Corporation (NYSE:LON:CCL) shares to $34.00, up from the previous $32.00, while reiterating a Buy rating on the stock.
Currently trading at $25.63, CCL has shown impressive momentum with a 41.57% return over the past year. The revision reflects a positive outlook on the company's financial guidance and the strength of the cruise industry's demand and pricing. According to InvestingPro, analyst targets for CCL range from $14 to $35, with 2 analysts recently revising their earnings estimates upward.
The analyst from Stifel commented on the adjustment, noting that the initial full-year guidance provided by Carnival (NYSE:CCL) Corporation typically leads to disappointment and a subsequent sell-off among investors.
Contrary to this trend, the market responded positively to the company's projections. The analyst believes that while Carnival's initial guidance for 2025 appears conservative, it aligns with the consensus, indicating robust demand and pricing for cruises in the upcoming year.
This optimism is supported by CCL's strong financial performance, with revenue growing 15.88% and achieving profitability in the last twelve months. For deeper insights into CCL's financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and additional ProTips.
Carnival's conservative stance on certain yield metrics, such as onboard spending and close-in pricing, was highlighted. However, the analyst anticipates that the actual yields for 2025 could surpass expectations by 5% or more, potentially leading to earnings per share (EPS) with a $2-handle. This outlook is based on the assumption that Carnival will experience significant free cash flow (FCF) generation beginning in 2025.
The raised price target to $34 represents a $2 increase from the previous target set by Stifel. This adjustment is grounded in the strong performance anticipated for Carnival in the following year, as indicated by the company's financial guidance and the current market conditions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.