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Carnival (CCL) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Carnival (CCL) closed the most recent trading day at $45.95, moving +1.32% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.83%. Elsewhere, the Dow gained 0.93%, while the tech-heavy Nasdaq added 0.9%.

Coming into today, shares of the cruise operator had lost 1.84% in the past month. In that same time, the Consumer Discretionary sector lost 4.47%, while the S&P 500 lost 2.38%.

Wall Street will be looking for positivity from CCL as it approaches its next earnings report date. On that day, CCL is projected to report earnings of $2.53 per share, which would represent year-over-year growth of 7.2%. Meanwhile, our latest consensus estimate is calling for revenue of $6.25 billion, up 7.02% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.34 per share and revenue of $20.35 billion. These totals would mark changes of +1.88% and +7.79%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for CCL. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. CCL is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that CCL has a Forward P/E ratio of 10.45 right now. This represents a discount compared to its industry's average Forward P/E of 19.68.

Also, we should mention that CCL has a PEG ratio of 1.08. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Leisure and Recreation Services industry currently had an average PEG ratio of 1.51 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 186, which puts it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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