Carnival stock price went vertical this week, reaching its highest level since June 2021, as signs showed that the cruise industry was still thriving. It jumped to $27.86 on Tuesday in New York, up by over 352% from its lowest level in 2022, making it one of the best-performing companies in Wall Street.
Royal Caribbean earnings boosts CCL stock
The Carnival stock price has staged a strong comeback this week, following Royal Caribbean’s upbeat results, which showed that the industry was still upbeat.
In a statement, the company said that its gross margin yields rose 23.8% in 2024, while the net yields moved upwards by 11.6%. This growth led to a total revenue of $16.5 billion and a net income of $2.9 billion.
Royal Caribbean expects its business to continue thriving this year as the WAVE season bookings hit a record high. It also expects that its fuel costs will stabilize this year, with its first-quarter costs being about $277 million.
These are spectacular results for a company that was on the verge of collapsing a few years ago at the height of the pandemic. Its annual revenue has jumped from $1.52 billion in 2021 to about $16.5 billion.
Royal Caribbean’s results are a sign that other companies in the industry like Carnival and Viking Global are doing well.
Carnival’s business is thriving
The most recent results showed that Carnival’s business continued thriving, a sign that demand, especially among young customers is rising.
Its full-year revenue jumped to over $25 billion, a 15% increase from 2024 as its net income hit $1.9 billion.
Most importantly, its forward bookings are still soaring, which are providing it with cheap financing. About two thirds of its 2025 was already booked, meaning that its business can expect to be fully booked soon.
The management expects that its net yield for the year to be 4.2%, with the adjusted net income seen coming in at $2.4 billion.
Therefore, the valuation divergence between Carnival and Royal Caribbean could be a catalyst for the Carnival stock price. Royal Caribbean has a forward P/E ratio of 23.50, much higher than Carnival’s 15.
Carnival has a forward 1-year P/E ratio of 14.7, much lower than Royal Caribbean’s 20.25. Therefore, while Royal Caribbean’s business is doing better and deserves a more premium valuation, there is a likelihood that Carnival will bridge that gap.
Carnival stock price forecast
The weekly chart shows that the CCL share price has been in a strong bull run this year. It has already crossed the 23.6% Fibonacci Retracement point at $21.73.
The stock has formed a golden cross as the 200-week and 50-week Exponential Moving Averages (EMA), a popular bullish chart pattern. It is also nearing the 38.2% retracement point at $30.38, while the Relative Strength Index (RSI) and MACD have continued rising.
Therefore, the path of the least resistance for the stock is bullish, with the next point to watch being at $37.40, the 50% retracement point, which is about 35% above the current level.
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