There is “meaningful upside” in Carnival Corporation (NYSE:CCL)’s guidance for 50% plus growth, UBS analysts wrote in a note to clients.
They have a ‘Buy’ rating on shares of the world's largest cruise operator with a 12-month target price of $12, both of which, however, are under review.
The analysts stated that by using midpoint of the company’s 2023 guidance, the implied 2026 earnings before interest, taxes, depreciation and amortization (EBITDA) of $6.63 billion is $375 million greater than their estimate of $6.255 billion, which could imply earnings per share (EPS) closer to $2.00 in 2026, well above their estimate of $1.64 and above Street at $1.28.
They noted that Carnival also raised its second half outlook and pointed to deleveraging driving an additional $275 million to its bottom line for fiscal year 2023.
“Wave season booking volume actually accelerated in Q2, with volume ahead of Q1 levels, which is historically the highest volume quarter of the year,” analysts at UBS wrote.
They added that bookings and deposits are at record levels, with deposits of $7.2 billion up 26% from 2019 levels due to higher volume and capacity.
Shares of Carnival sailed 9% higher to $15.82 in late-afternoon trading on Tuesday.
Contact Sean at sean@proactiveinvestors.com