Carnival's Core Business Is Cruising - Initiating With A Buy
Carnival Corporation & plc is initiated with a 'Buy' rating due to strong demand, rising net yields, and an attractive valuation following a recent pullback. The company reported record Q1 revenue of $6.2 billion, a 2.7% year-over-year increase in net yield, and adjusted EPS doubled to $0.20. Carnival plans $14 billion in shareholder returns from 2026 to 2029, including a $2.5 billion buyback and over $800 million in dividends in 2026. Despite higher fuel costs, operational improvements and disciplined capacity growth support a favorable outlook.
- ▪Carnival reported record Q1 revenue of $6.2 billion and a 2.7% year-over-year increase in net yield.
- ▪Adjusted EPS rose 50% year-over-year to $0.20 in the first quarter.
- ▪The company plans $14 billion in shareholder distributions from 2026 to 2029, starting with a $2.5 billion buyback.
- ▪Carnival expects to pay over $800 million in dividends in 2026.
- ▪Shares trade at a forward P/E with over a 20% discount to the sector despite operational and demand strength.
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