On Monday, Carnival Corporation (NYSE:CCL) shares received a reaffirmation of a Buy rating and a $22.00 price target from Citi. The company reported a record third-quarter Adjusted EBITDA of $2.8 billion, surpassing both the consensus estimate of $2.7 billion and their own guidance of approximately $2.66 billion. The cruise operator also announced third-quarter adjusted earnings per share of $1.27, which exceeded analyst expectations of $1.17 and the firm's estimate of $1.19.
The better-than-expected financial results were attributed in part to lower costs, some of which were due to the timing of expenses. Moreover, the company's per diems, or daily rates, comfortably exceeded forecasts. In light of these results, Carnival has slightly raised its full-year guidance, adjusting it just above the third-quarter performance.
Carnival's strong third-quarter showing comes as a positive sign for the company, which has been navigating the challenges of the travel industry in the wake of the global pandemic. The reported figures indicate a robust recovery and a potential return to pre-pandemic operational levels.
The financial institution's continued support of Carnival with a Buy rating and a stable price target suggests confidence in the cruise line's business model and future prospects. The analyst's remarks underscore Carnival's ability to manage costs effectively while still generating revenue that surpasses market expectations.
Investors and market watchers will likely keep a close eye on Carnival's performance as it moves forward, especially considering the raised full-year guidance and the implications it may have for the company's financial health and stock performance.
In other recent news, Carnival Corporation has seen a surge in cruise demand, leading to an increase in its annual profit forecast for the third time this year. The company's third-quarter revenue reached $7.9 billion, surpassing market expectations. Analyst firms such as Stifel, Goldman Sachs, BofA Securities, and Mizuho Securities have all reaffirmed their positive ratings on Carnival shares, citing strong earnings, stable demand, and a robust outlook.
The company's third fiscal quarter financial results showed gross and net revenue figures at $7.9 billion and $6.1 billion, respectively, slightly surpassing the analyst's projections. Adjusted EBITDA for the quarter reached $2.8 billion, exceeding the guidance by $160 million. The company's earnings per share on both a GAAP and adjusted basis came in at $1.26 and $1.27, respectively, outperforming the forecasted $1.17 EPS.
Carnival has also announced the expansion of its fleet with three new liquefied natural gas (LNG)-powered ships, scheduled for delivery in 2029, 2031, and 2033. The company is in the process of strategic brand consolidation, with plans to sunset P&O Cruises Australia and integrate it into Carnival Cruise Line. Moreover, Carnival Corporation is developing a new destination, Celebration Key, expected to launch in 2025. These are recent developments indicating Carnival Corporation's continued growth.
InvestingPro Insights
Carnival Corporation's strong third-quarter performance is further supported by real-time data from InvestingPro. The company's revenue for the last twelve months as of Q2 2024 stood at $23.44 billion, with an impressive revenue growth of 34.02% over the same period. This aligns with the article's mention of better-than-expected financial results and increased full-year guidance.
InvestingPro Tips highlight that Carnival is trading at a low P/E ratio relative to its near-term earnings growth, with a PEG ratio of 0.2 as of Q2 2024. This suggests that the stock may be undervalued considering its growth prospects, which could be of interest to investors following the positive analyst rating mentioned in the article.
Moreover, InvestingPro data shows that Carnival's EBITDA growth for the last twelve months as of Q2 2024 was a staggering 310.04%, reflecting the company's strong recovery trajectory discussed in the article. This exceptional growth rate underscores Carnival's ability to capitalize on the rebound in the travel industry post-pandemic.
For readers interested in a more comprehensive analysis, InvestingPro offers 10 additional tips for Carnival Corporation, providing a deeper insight into the company's financial health and market position.
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