As Carnival Prepares to Set Sail with Earnings, Investors Should Chart a Course for Success
Tomorrow, Carnival Corporation (NYSE:CCL) will drop anchor with its latest earnings report, and investors are eagerly awaiting the results. Last quarter, the cruise ship giant navigated treacherous waters to deliver a 17.7% year-over-year revenue increase, with a whopping 24.3 million passenger cruise days – an 11.5% jump from the previous year. The company’s impressive performance exceeded analysts’ expectations, with revenue reaching $5.78 billion.
This quarter, analysts are forecasting a 14.1% year-over-year revenue growth to $7.82 billion, a slight slowdown from the 59.2% surge in the same quarter last year. Adjusted earnings are expected to come in at $1.15 per share. The majority of analysts have reaffirmed their estimates in the last 30 days, indicating confidence in the company’s ability to stay on course.
Carnival’s peers in the consumer discretionary sector have been making waves, with Scholastic beating revenue estimates by 1.6% and posting a 3.8% year-over-year sales growth. The stock responded with a 6% uptick. Meanwhile, the sector as a whole has seen a 4.9% average increase in share prices over the last month, with Carnival leading the pack with a 14.6% surge.
As the company prepares to release its earnings report, investors are wondering if Carnival is a buy or sell. With an average analyst price target of $28 – significantly higher than its current share price of $18.72 – the answer may lie in the company’s ability to continue its growth trajectory. One thing is certain: when a company has a cash surplus, strategic share buybacks can be a savvy move – as long as the price is right.
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