Carnival Corporation (NYSE:CCL) Maintains Positive Outlook with UBS "Buy" Rating

• Carnival Corporation (NYSE:CCL) has been given a "Buy" rating by UBS, with a price target increase from $37 to $38.
• The company shows significant balance sheet improvement, aiming for a deleveraging target below three times, and has reinstated dividends.
• Carnival's financial guidance for fiscal year 2026 includes a net yield growth of 2.5% year-over-year, an adjusted EBITDA of $7.63 billion, and an adjusted EPS of $2.48.

Carnival Corporation (NYSE:CCL) is a leading cruise operator known for its diverse fleet and global reach. The company offers a wide range of cruise experiences, catering to various demographics and preferences. Competitors include Norwegian Cruise Line Holdings Ltd. and Royal Caribbean Cruises Ltd. On January 12, 2026, UBS maintained its "Buy" rating for CCL, raising the price target from $37 to $38, with the stock trading at $31.72.

Despite a slight dip in its stock price, Carnival's positive outlook is supported by its return to investment-grade leverage and the reinstatement of dividends. The company has shown significant balance sheet improvement, with strong free cash flow generation covering future fleet renewals. Carnival aims for a deleveraging target of below three times and is engaging in opportunistic share repurchases.

Carnival's financial guidance for fiscal year 2026 is promising, with a net yield growth of 2.5% year-over-year, an adjusted EBITDA of $7.63 billion, and an adjusted EPS of $2.48. These projections are supported by robust booking trends at higher prices. The company is trading at a forward 12-month P/E ratio of 12.94x, lower than the industry average of 17.18x, despite a 35.4% increase in share price over the past year.

Carnival has achieved significant improvement in revenue flow-through, with operating income per berth day reaching its highest level in nearly two decades. This has bolstered the company's margin performance, supported by higher occupancy rates, increased pricing, and enhanced onboard spending. The company has effectively leveraged fixed ship costs and implemented cost controls to protect its margins.

Currently, CCL is trading at $31.69, reflecting a decrease of 1.39% or $0.45. The stock has traded between $31.42 and $32 today, with a 52-week range of $15.07 to $32.89. Carnival's market capitalization is approximately $41.56 billion, with a trading volume of 2,422,263 shares. Despite challenges like cost inflation and regulatory costs, Carnival's strong financial position and strategic initiatives support its growth prospects.