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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 $44.50, moving +1.88% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.75%. At the same time, the Dow added 0.69%, and the tech-heavy Nasdaq gained 1.32%.

Coming into today, shares of the cruise operator had lost 0.5% in the past month. In that same time, the Consumer Discretionary sector gained 4.54%, while the S&P 500 gained 3.42%.

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 $0.50 per share. This would mark a year-over-year decline of 28.57%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.56 billion, up 2.28% from the year-ago period.

CCL's full-year Zacks Consensus Estimates are calling for earnings of $4.27 per share and revenue of $20.57 billion. These results would represent year-over-year changes of +0.23% and +8.93%, 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 a Zacks Rank #3 (Hold).

Investors should also note CCL's current valuation metrics, including its Forward P/E ratio of 10.07. Its industry sports an average Forward P/E of 18.04, so we one might conclude that CCL is trading at a discount comparatively.

Investors should also note that CCL has a PEG ratio of 1.01 right now. 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. Leisure and Recreation Services stocks are, on average, holding a PEG ratio of 1.6 based on yesterday's closing prices.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 223, putting it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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