CCL Approaches 52-Week Peak: Should You Take Profits or Remain Invested?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 01 2025
0mins
Should l Buy RCL?
Source: NASDAQ.COM
Carnival Corporation Performance Overview
- Stock Performance: Carnival Corporation (CCL) shares are trading near a 52-week high of $32.77, having gained 35.5% over the past three months, significantly outperforming the Zacks Leisure and Recreation Services industry (19.4%) and the S&P 500 Index (9.5%).
- Technical Indicators: The stock is above its 50-day moving average, indicating strong upward momentum and price stability.
Booking and Revenue Growth
- Robust Booking Momentum: Carnival has experienced record revenues and yields for eight consecutive quarters, with advanced bookings at historic highs. This is driven by longer lead times and limited capacity expansion, particularly in Europe and the Caribbean.
- Onboard Spending Strength: Higher onboard spending exceeded expectations in Q2, supported by targeted marketing and bundled packages. This trend is expected to continue into the latter half of 2025, enhancing onboard revenue as a key yield driver.
Strategic Enhancements
- Destination and Fleet Improvements: Carnival's destination strategy is proving effective, with Celebration Key generating premium pricing. Planned upgrades at RelaxAway and Isla Tropicale are set to enhance competitiveness. Fleet initiatives, including the AIDA Evolution program and new ship launches, are anticipated to drive demand and brand appeal.
Financial Health and Projections
- Improved Financial Foundation: In Q2 fiscal 2025, Carnival prepaid $350 million of 2026 notes, refinancing with 2031 senior unsecured debt, which reduced net interest expenses by $20 million. The net debt-to-EBITDA ratio improved to 3.7x from 4.1x, moving closer to investment-grade status.
- Earnings Estimates: The Zacks Consensus Estimate for CCL's fiscal 2025 EPS has risen from $1.96 to $2.00, reflecting strong analyst confidence. CCL's trailing 12-month return on equity (ROE) stands at 27.88%, surpassing the industry average of 24.29%.
Investment Outlook
- Valuation Metrics: CCL is trading at a forward P/E ratio of 14.45, below the industry average of 20.38, indicating an attractive investment opportunity compared to peers like Royal Caribbean and Norwegian Cruise.
- Analyst Confidence: The stock's fundamentals support a positive outlook, with analysts recommending accumulation of CCL shares. The company is positioned for sustained growth through strategic investments and a recovering balance sheet, despite trading near its 52-week highs.
Conclusion
- Overall Assessment: Carnival Corporation's strong booking momentum, increased onboard spending, strategic enhancements, and improved financial metrics underscore a robust turnaround story. The stock remains an appealing option for investors, with potential for further upside as the company continues to execute its growth and deleveraging strategies. CCL currently holds a Zacks Rank #2 (Buy).
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Analyst Views on RCL
Wall Street analysts forecast RCL stock price to fall
16 Analyst Rating
12 Buy
4 Hold
0 Sell
Strong Buy
Current: 332.800
Low
275.00
Averages
327.80
High
400.00
Current: 332.800
Low
275.00
Averages
327.80
High
400.00
About RCL
Royal Caribbean Cruises Ltd. is a cruise company, which owns and operates three global cruise brands: Royal Caribbean, Celebrity Cruises and Silversea Cruises. It also has an interest in TUI Cruises GmbH, which operates the German brands TUI Cruises and Hapag-Lloyd Cruises. Its ships offer a selection of worldwide itineraries that call on approximately 1,000 destinations on all seven continents. Royal Caribbean offers cruises and land destinations that generally feature a casual ambiance, as well as a variety of activities and entertainment venues. Celebrity Cruises offers a range of itineraries to destinations, including Alaska, Asia, Australia, Bermuda, Canada, the Caribbean, Europe, the Galapagos Islands, Hawaii, New Zealand, the Panama Canal and South America, with cruise lengths ranging from three to 14 nights. It also offers a range of private land destinations through Perfect Day at CocoCay and Royal Beach Club collection.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Clear Use of Proceeds: The net proceeds from this bond offering will be used to refinance senior debt maturing in 2026 and repay existing indebtedness, including potential term loans, thereby optimizing the company's capital structure and financial flexibility.
- Strong Underwriter Lineup: J.P. Morgan Securities, Morgan Stanley, and PNC Capital Markets are acting as lead underwriters for this offering, which enhances market confidence in the bonds and may improve their market acceptance.
- Compliance and Transparency: The offering is made under an automatic shelf registration statement, ensuring compliance and providing transparent disclosures, which enhances investor confidence in the company's future prospects.
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