TLDR
- Carnival stock surged 6.94% to $31.30, setting new 52-week high Friday
- Cruise operator reduced debt to $27.3 billion from pandemic peak of $33.2 billion
- Revenue expected to grow 6% in fiscal 2025 driven by higher fares and new destinations
- Stock trades at discount 13x forward earnings vs Royal Caribbean at 18x
- Technical breakout pattern signals potential upside if support levels hold
Carnival stock (CCL) closed Friday at $31.30 after gaining 6.94%, marking its second consecutive day of gains. The cruise operator reached a new 52-week high, surpassing its previous peak of $31.01 set on July 23rd.
The stock outperformed the broader market and key competitors during Friday’s rally. While the S&P 500 rose 1.52% and Walt Disney gained 2.28%, Carnival led cruise stocks with its 6.94% jump. Royal Caribbean gained 6.04% but lagged Carnival’s percentage gains.
Friday’s performance caps a remarkable recovery story for Carnival stock. Shares plummeted below $8 in April 2020 as the pandemic forced cruise shutdowns worldwide. The stock has now gained nearly 300% from those pandemic lows.
Revenue Recovery Drives Growth
Carnival’s financial metrics show steady improvement from pandemic impacts. The company expects revenue to rise 6% to $26.5 billion in fiscal 2025. Higher average fares are driving much of this growth, along with increased onboard passenger spending.
New destinations are boosting revenue potential. The company’s Celebration Key private island in the Bahamas gives Carnival another income stream from cruise passengers. These exclusive destinations command premium pricing while enhancing the cruise experience.
Fleet expansion supports long-term growth targets. Carnival operates 94 ships serving over 800 ports worldwide. Management plans to add 10 more vessels by fiscal 2028, expanding capacity in key markets.
The company has normalized passenger operations after pandemic disruptions. Occupancy rates climbed back above 100% by fiscal 2023. This metric indicates Carnival is filling ships beyond their rated capacity through creative cabin configurations.
Debt Reduction Shows Progress
Carnival continues reducing its pandemic-era debt burden. Total debt peaked at $33.2 billion in fiscal 2021 after the company borrowed heavily to survive cruise shutdowns. The debt load has since fallen to $27.3 billion as of Q2 2025.
Management is making strategic debt prepayments while refinancing at lower interest rates. This approach reduces both principal balances and interest expenses. The company’s net debt-to-EBITDA ratio improved to 3.7x from 4.1x in the first quarter.
Improving margins support debt reduction efforts. Carnival returned to profitability in fiscal 2024 after several years of losses. Higher fares, lower fuel costs, and operational efficiencies from newer LNG ships are boosting margins across the fleet.
Analysts project strong earnings growth ahead. Earnings per share are expected to grow at a 22% compound annual rate. Adjusted EBITDA should increase at an 8% annual pace as the recovery continues.
Carnival stock trades at attractive valuations compared to peers. The stock trades at 13x forward earnings versus Royal Caribbean at 18x. This valuation gap reflects investor concerns about Carnival’s higher debt levels but may present an opportunity as debt declines.
Technical analysis suggests momentum is building for Carnival stock. A breakout pattern appears underway with upside targets identified if converted support levels hold at current prices.
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