Carnival Extends Rally on Strong Cruise Demand and Pricing

Carnival Corporation & plc (CCL: US) shares are now trading over 130% year-to-date as investors and analysts reflect positively on the company’s execution and strong business momentum for cruise operators. 

Last week, the cruise company reported stronger-than-expected FQ2 results to send its shares further higher. Carnival reported an adjusted loss per share of $0.31 on sales of $4.91 billion, topping the analyst consensus for a loss per share of $0.34 on revenue of $4.77 billion.

The company said that the number of passengers carried on its cruises topped 3 million in the second fiscal quarter. The occupancy rate was as much as 98%, a significant increase compared to the 69% reported for the same period last year as the cruise sector continues to recover from a coronavirus-inducted shock. 

Carnival Corporation & plc's Chief Executive Officer Josh Weinstein commented, "We reached a meaningful inflection point for revenue this quarter, with net yields surpassing 2019's strong levels, and we achieved positive operating income, cash from operations, and adjusted free cash flow."

The stock received a further boost on Friday after investment bank Jefferies raised its recommendation on the cruise operator’s shares to Buy. Analysts argue that T CCL shares as "more broadly investable, which could progress over several years." The new price target at Jefferies of $25 per share offers more upside in CCL despite a massive YTD rally.

Congressman Ro Khanna was actively trading CCL shares throughout 2022, as well as this year. On the other hand, Congressman Eric Burlison sold $15,000 - $50,000 worth of CCL shares in February, practically missing out on a large chunk of this year’s rally.