Carnival Corporation (CCL), one of the world’s largest cruise companies, reported better‑than‑expected earnings and EBITDA for Q2 of FY 2026. Freedom Broker analysts have reaffirmed their “Buy” rating on the company’s shares and maintained the target price at USD 35 per share. With the current market price at USD 28.72, the upside potential for the stock stands at approximately 22 %.
Carnival is one of the largest cruise operators globally and manages over 20 brands, including Carnival Cruise Line, Princess Cruises, Holland America Line, Cunard, and P&O Cruises. The company operates in North America, Europe, and Australia and remains a key player in the global cruise tourism industry.
In Q2, Carnival’s revenue reached a record USD 6.66 bln and broadly aligned with analysts’ expectations. At the same time, adjusted EBITDA amounted to USD 1.58 bln, while adjusted earnings per share came in at USD 0.41, exceeding market forecasts. Freedom Broker notes that cost‑control measures were the main driver behind the improved results, rather than accelerated revenue growth.
Additional support for the financial metrics came from a 5.6 % YoY reduction in fuel consumption per unit of capacity. Compared to pre‑pandemic 2019, this metric has already decreased by 27%, indicating a long‑term improvement in the fleet’s operational efficiency.
Customer deposits reached a new all‑time high of USD 9 bln, reflecting sustained robust demand for cruises. At the same time, the company continued to strengthen its balance sheet: the net debt‑to‑EBITDA ratio declined to 3.1x versus 3.4x at the end of the previous year, and the volume of share buybacks exceeded USD 450 million.
A restraining factor was the downward revision of the net yield forecast for 2026 due to weaker demand on certain European routes, primarily in the Mediterranean. However, Freedom Broker believes this is a local phenomenon tied to geopolitical uncertainty in the Middle East, rather than a systemic deterioration in market conditions.
According to the analysts, the key growth drivers for Carnival remain the further reduction of leverage, continued strict cost discipline, and the recovery of yields on European routes in 2027. Against this backdrop, the company’s shares, in Freedom Broker’s view, retain upside potential and continue to trade at a discount relative to their own historical levels and those of major peers.
Not an individual investment recommendation.