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Carnival (CCL) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Carnival (CCL) closed at $45.96 in the latest trading session, marking a -1.5% move from the prior day. This change lagged the S&P 500's 0.73% loss on the day. Elsewhere, the Dow lost 0.37%, while the tech-heavy Nasdaq lost 1.32%.

Prior to today's trading, shares of the cruise operator had gained 1.04% over the past month. This has outpaced the Consumer Discretionary sector's loss of 2.83% and the S&P 500's loss of 0.27% in that time.

Investors will be hoping for strength from CCL as it approaches its next earnings release. In that report, analysts expect CCL to post earnings of $2.53 per share. This would mark year-over-year growth of 7.2%. Our most recent consensus estimate is calling for quarterly revenue of $6.25 billion, up 7.02% from the year-ago period.

CCL's full-year Zacks Consensus Estimates are calling for earnings of $4.34 per share and revenue of $20.35 billion. These results would represent year-over-year changes of +1.88% and +7.79%, respectively.

Investors should also note any recent changes to analyst estimates for CCL. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. CCL is currently sporting a Zacks Rank of #5 (Strong Sell).

Investors should also note CCL's current valuation metrics, including its Forward P/E ratio of 10.75. For comparison, its industry has an average Forward P/E of 19.12, which means CCL is trading at a discount to the group.

Meanwhile, CCL's PEG ratio is currently 1.11. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Leisure and Recreation Services industry currently had an average PEG ratio of 1.4 as of yesterday's close.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 161, which puts it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow CCL in the coming trading sessions, be sure to utilize Zacks.com.


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