Carnival Corp.’s stock is hitting a new 52-week high as the cruise operator sees demand accelerate.
Jeoffrey Guillemard/Bloomberg
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Carnival
is heading into the third quarter with the wind in its sails.
The cruise operator’s stock (ticker: CCL) was the top performer in the S&P 500 for the second quarter, rising 85.5% for the three months through June. Analysts have been weighing in on the stock, which also helped lift shares of other cruise operators.
Norwegian Cruise Line Holdings
(NCLH) shares are up 61.8% in the past three months, while
Royal Caribbean Group
(RCL) shares are up 58.8%.
And Carnival and Norwegian were hitting new 52-week highs on Monday. Carnival was up 1.6% for the day, while Norwegian was up 1.5%. The
S&P 500
was flat at midday.
A catalyst was Carnival’s earnings last week, when executives said they were seeing demand accelerate as bookings of future sailings soar. Booking volume for the second quarter beat that of the first, the previous record high.
J.P. Morgan
analyst Matt Boss raised his price target to $18 from $16, keeping an Overweight rating on Carnival stock in a note on Friday. He said Carnival has an “opportunity to drive improved brand clarity and pricing power with increased investment in advertising.”
It is the latest in a spate of Wall Street notes on the shares. Also on Friday,
Jefferies
raised its rating on the stock to Buy from Hold, with a price target of $25.
“The journey from a good trade to a long-term investment case remains ahead,” said Jefferies analyst David Katz in a note entitled, “We cannot direct the wind, but adjust the sails.”
Katz also cited increased sales and marketing efforts and more sophisticated advertising and customer engagement strategies.
Second-quarter revenue more than doubled from last year, to $4.9 billion, but Carnival’s third quarter outlook was slightly weaker than analyst expectations at the midpoint of the range, even though it raised its full-year forecast.
J.P. Morgan cited booking trends for the first half of next year. Management pointed out that it was already 30% to 50% booked with no letdown in onboard spending.
That means Carnival already has about 40% of next year’s business booked, said
Wells Fargo
,
which has the stock at Equal Weight with a $15 price target.
The cruise operator is looking “to capitalize on strong/accelerating demand,” Wells Fargo said, closing a price gap between cruises and land-based vacations.
UBS
analysts, which have the stock at a Buy with a $12 price target, expect Carnival to talk more about its new private island destination in September and how that may drive ticket prices and onboard spending when it opens in 2025.
Royal Caribbean has demonstrated high returns from its CocoCay location in the Bahamas, UBS noted. Celebrity Cruises just announced plans to stop its ships at CocoCay starting next summer.
Write to Liz Moyer at [email protected]
Source: https://www.barrons.com/articles/carnival-stock-price-today-ef0d89c4?siteid=yhoof2&yptr=yahoo