What Happened?
Shares of cruise ship company Carnival (NYSE: CCL) jumped 7.8% in the afternoon session after its rival, Royal Caribbean, reported strong results and an upbeat full-year profit forecast, driven by record booking demand. Royal Caribbean's outlook for 2026 was above what Wall Street had expected. The company noted that since the start of the key "wave" booking period, it had seen the seven highest booking weeks in its history. A significant portion of its 2026 cruise capacity was already booked at record rates. The strong results from a major competitor provided a boost to rivals, suggesting very strong consumer demand across the entire cruise industry. This investor optimism lifted shares of other cruise lines, including Carnival.
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What Is The Market Telling Us
Carnival’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 1 month ago when the stock gained 8.5% on the news that the company reported fourth-quarter 2025 earnings that beat profit expectations and provided an optimistic forecast for the upcoming year. While the company's revenue of $6.33 billion for the quarter came in slightly below Wall Street's estimates, investors focused on the stronger-than-expected profitability. Carnival posted an adjusted earnings per share of $0.34, significantly surpassing the consensus estimate of $0.25. Additionally, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), a key measure of profitability, also exceeded expectations. Looking ahead, Carnival issued guidance for the full year 2026 that was ahead of analyst forecasts for both adjusted EPS and EBITDA, signaling management's confidence in continued financial strength and driving positive investor sentiment.
Carnival is flat since the beginning of the year, and at $31.17 per share, it is trading close to its 52-week high of $32.49 from August 2025. Investors who bought $1,000 worth of Carnival’s shares 5 years ago would now be looking at an investment worth $1,670.
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