Carnival Stock Before Q1 Earnings: Buy Now or Wait for Results?

Carnival Corporation & plc CCL is scheduled to release first-quarter fiscal 2025 results on Friday. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 75%.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.CCL’s Q1 Estimate RevisionsThe Zacks Consensus Estimate for Carnival’s first-quarter fiscal 2025 earnings per share is pegged at 2 cents, suggesting 114.3% year-over-year growth. The consensus mark has been unchanged over the past 60 days. The consensus estimate for revenues is pegged at $5.74 billion, suggesting a 6.3% rise from the year-ago quarter's reported figure.Carnival’s Earnings Surprise HistoryCCL has an impressive record of surpassing earnings expectations. It has beat the consensus mark in the trailing four quarters. The average surprise for this period is 326.4%, as shown in the chart below. Image Source: Zacks Investment Research Q1 Earnings Whispers for CarnivalOur proven model does not conclusively predict an earnings beat for Carnival this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.Earnings ESP: Carnival has an Earnings ESP of -2.11%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Zacks Rank: The company sports a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors to Influence CCL’s Q1 PerformanceCarnival’s fiscal first-quarter performance is likely to have been fueled by strong consumer demand and a record-breaking booking environment. Thanks to improved operational execution across its brands, CCL has been witnessing solid booking trends for a few quarters. Higher pricing across major brands, coupled with a rise in onboard spending, has driven robust yield growth. Additionally, cost-saving initiatives have contributed to improved profitability.Our model estimates fiscal first-quarter passenger ticket revenues to rise 5.1% year over year to $3.8 billion. We expect onboard and other revenues to increase 6.5% year over year to $1.9 billion.Carnival’s strategic investment in advertising has been yielding significant returns, stimulating demand across its portfolio with the launch of several campaigns during the peak season. In 2024, web visits rose 40% and paid search jumped approximately 60% from the 2019 levels. The uptrend is likely to have continued in first-quarter fiscal 2025. The company’s marketing efforts, and support from travel agents and narrowing the unjustified price gap with land-based vacations have helped attract newer and returning guests, leading to market share gains.Increased focus on improving commercial activities and portfolio management, and continued strong per-diem growth are likely to have strengthened yields in the fiscal first quarter.A strong pricing environment across itineraries is likely to have aided the company’s performance in the to-be-reported quarter. For the first quarter of fiscal 2025, our model predicts adjusted EBITDA to increase 19.1% year over year to $1.01 billion.However, high costs are likely to have negatively impacted the company’s bottom line. Per our model, total operating expenses in the fiscal first quarter are anticipated to rise 3.4% year over year to $3.8 billion.Carnival Stock Price Performance & ValuationCCL shares have gained 29.9% in the past year compared with the Zacks Leisure and Recreation Services industry’s rise of 4.9%. In the same time frame, stocks like Norwegian Cruise Line Holdings Ltd. NCLH, Royal Caribbean Cruises Ltd. RCL and OneSpaWorld Holdings Limited OSW have grown 3.1%, 71.5% and 36.4%, respectively.CCL Stock Price Performance Image Source: Zacks Investment Research Carnival is trading at a discount. CCL is currently trading at a forward 12-month price-to-sales (P/S) multiple of 0.93X, well below the industry average of 2.01X, reflecting an attractive investment opportunity.Carnival P/S Ratio (Forward 12 Months) Image Source: Zacks Investment ResearchInvestment Thoughts on CCLCarnival has demonstrated strong demand trends, robust booking momentum and strategic marketing efforts, which have contributed to its recent growth. The company has effectively leveraged pricing strength and onboard spending to drive higher yields, supported by improved operational execution.However, while revenue growth remains solid, cost pressures continue to weigh on profitability. Despite its discounted valuation relative to industry peers, the stock has already experienced significant gains, making further upside less compelling for new investors.Given these factors, existing investors may benefit from holding onto their positions to capitalize on continued strength, but fresh buys should be approached with caution until clearer signs of sustained profitability emerge.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks