# Stifel raises CARNIVAL price target on expected guidance boost

Stifel raised its Carnival Corp. (CCL) price target to $33 from $31, maintaining a Buy rating, citing strong demand and pricing trends ahead of fiscal Q2 2025 results on June 19. The firm expects Carnival to raise full-year guidance, noting healthy booking patterns and stable onboard spending, supported by a 12.7% revenue growth over the last twelve months to $25.4 billion. Recent positive catalysts include a Fitch upgrade to 'BB+' with a Positive outlook, HSBC upgrading to 'Hold' with a $24 target, and debt refinancing efforts projected to save over $20 million annually in interest expenses.

Analysis

Stifel has increased its price target for Carnival Corporation (CCL) to $33.00 from $31.00, maintaining a Buy rating, driven by expectations of continued strong close-in demand, favorable pricing trends, and an anticipated raise in full-year guidance when Carnival reports fiscal second-quarter 2025 results on June 19. This optimism is supported by Carnival's 12.7% revenue growth over the last twelve months to $25.4 billion and a 38% year-over-year increase in EBITDA for the first quarter of 2025, accompanied by a 7.3% rise in net yields. Booking patterns remain healthy, and onboard customer spending has not deteriorated. Carnival is actively improving its financial position through debt reduction, evidenced by Fitch Ratings upgrading its Long-Term Issuer Default Rating to 'BB+' with a Positive outlook and recent refinancing activities, such as issuing $1 billion in senior unsecured notes at 5.875% to redeem existing higher-cost debt, projected to save over $20 million annually in net interest expenses. Other analysts are also recognizing the positive trajectory, with HSBC upgrading the stock to 'Hold' with a $24 target. Stifel believes investors are underappreciating Carnival's significant free cash flow generation, which is aiding debt reduction and could lead to a return to investment grade status. While the stock has rallied, Stifel's new $33 target, representing 10 times its estimated 2026 EBITDA, suggests further upside, even as InvestingPro analysis indicates the stock is currently trading above its Fair Value. UBS also notes that cruise lines, including Carnival, are expected to outperform hotels in pricing for 2025 and 2026.

Key Decisions for Investors

• Investors should consider the robust operational performance characterized by strong demand, pricing power, and successful debt management, which underpins Stifel's positive outlook and upgraded price target.
• The upcoming fiscal second-quarter 2025 earnings report on June 19 will be a critical data point; confirmation of continued strength and a raised full-year guidance, as projected by Stifel, could serve as a significant catalyst for the stock.
• While Stifel emphasizes potential upside from strong free cash flow generation and debt reduction leading towards investment grade status, investors should also weigh this against InvestingPro's assessment that the stock is trading above its Fair Value, suggesting careful consideration of valuation and entry points.