Carnival Corporation & plc CCL is scheduled to release second-quarter fiscal 2026 results on June 23.
The Zacks Consensus Estimate for CCL’s fiscal second-quarter earnings per share (EPS) is pegged at 35 cents, in line with the year-ago quarter. The consensus mark for earnings has increased in the past seven days.
CCL’s Earnings Estimate Trend
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The consensus mark for fiscal second-quarter revenues is pegged at $6.64 billion, indicating growth of 5% from the year-ago quarter’s reported figure.
Carnival has an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 25.3%.
CCL Earnings Surprise History
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What the Zacks Model Unveils for Carnival
Our proven model predicts an earnings beat for Carnival for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) for this to happen. This is exactly the case here.
Earnings ESP: CCL has an Earnings ESP of +0.48%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Shape Carnival’s Q2 Results
Record Booking Position Supports Revenue Visibility: Demand trends are likely to have remained favorable in the fiscal second quarter. Carnival entered the period with strong booking momentum, as bookings for current-year sailings increased 10% year over year and customer deposits reached a record fiscal first-quarter level of nearly $8 billion. The company also indicated that nearly 85% of the 2026 inventory was already booked at historically high prices, reflecting continued consumer demand for cruise vacations.
Pricing Strength Continues to Support Passenger Revenues: Favorable pricing trends are likely to have supported passenger ticket revenues in the fiscal second quarter. Continued close-in demand, along with historically high booking prices, contributed to stronger yields in the fiscal first quarter and is likely to have remained supportive during the quarter under review. Our model estimates fiscal second-quarter passenger ticket revenues to rise 3% year over year to $4.23 billion.
Onboard Spending Trends Remain Favorable: Increased guest spending is likely to have contributed to revenue growth. Carnival reported that guests continued purchasing more packages, excursions and other experiences before boarding, while onboard spending remained strong as the company entered the fiscal second quarter. These trends are likely to have supported onboard and other revenues during the quarter. Per our model, onboard and other revenues are expected to increase 7.1% year over year to $2.38 billion.
Revenue Management Initiatives Drive Yield Growth: Investments in revenue management, marketing and guest engagement tools are likely to have supported yield improvement. Longer booking windows, stronger conversion rates and higher pre-cruise purchases are expected to have aided pricing and onboard spending trends during the quarter.
Challenges Likely to Weigh on Performance
Fuel Inflation and Cost Pressures Remain a Headwind: Elevated fuel prices are likely to have weighed on profitability despite strong demand trends. While fuel-consumption initiatives and cost-saving efforts continue to provide support, higher fuel costs remain a notable challenge. Per our model, total operating expenses in the fiscal second quarter are anticipated to rise 7.2% year over year to $4.17 billion.
CCL’s Stock Price Performance & Valuation
Carnival’s shares have gained 19.9% in the past three months, outperforming the Zacks Leisure and Recreation Services industry and the S&P 500, as shown in the chart below.
CCL Three-Month Price Performance
Image Source: Zacks Investment Research
The company’s peers, including Royal Caribbean Cruises Ltd. RCL, OneSpaWorld Holdings Limited OSW and Norwegian Cruise Line Holdings Ltd. NCLH, gained 10.8% 22.1% and 1%, respectively, in the same time period.
From a valuation perspective, Carnival stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 12.34, well below the industry average of 16.72.
CCL’s P/E Ratio (Forward 12-Month) vs. Industry
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Other industry players, such as Royal Caribbean, OneSpaWorld Holdings and Norwegian Cruise, have a P/E of 16.32, 21.6 and 10.89, respectively.
Conclusion: Hold CCL Stock Ahead of Earnings
Carnival is likely to have delivered a solid fiscal second quarter, supported by strong booking trends, favorable pricing and healthy onboard spending. Record customer deposits, historically high booking prices and continued demand for cruise vacations are expected to have supported revenue growth. Ongoing investments in revenue management and guest engagement initiatives are also likely to have aided yield performance.
However, elevated fuel prices and higher operating costs are likely to have weighed on profitability, partially offsetting the benefits of strong demand. While the company's long-term outlook remains encouraging, these cost pressures suggest a balanced near-term view. Investors may consider holding the stock while monitoring pricing trends, booking momentum and expense management in the coming quarters.
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Carnival Corporation (CCL): Free Stock Analysis Report
Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report
Norwegian Cruise Line Holdings Ltd. (NCLH): Free Stock Analysis Report
OneSpaWorld Holdings Limited (OSW): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).