After the cruise industry crashed heavily during pandemic times, 2020-2021 to be exact, now we are seeing them ready to back on track. Carnival Cruise Line (CCL, Financial), the world's largest cruise operator, reported higher-than-expected bookings and the deposits they collected are at record levels. This is because they implement cost-cutting strategies to improve sales and they are seeing the sales really improved.
The future bookings for cruise travel in 2025 that is higher than expected is viewed positively by investors, meaning that the demand for cruises might be more resilient than many had anticipated. Despite economic uncertainties, the middle class families which are the target market of Carnival, seem to be less affected.
Josh Weinstein, the CEO of Carnival, said in the announcement of the financial result of third quarter 2024 "With nearly half of 2025 booked and less inventory remaining for sale than the prior year, we are leveraging strong demand to achieve record ticket pricing (in constant currency). Our brands continue to deliver robust bookings momentum, with all our brands ahead on price for 2025 sailings, based on the success of their demand generation efforts along with the exciting offerings and unparalleled experiences we consistently provide our guests. Likewise, 2026 is off to an unprecedented start achieving record booking volumes in the last three months,".
Source: Source: GuruFocus Manual of Stocks
While the figures in 2016-2019 showed gross margins of 40s and net margins of 14-16 percent, the COVID-19 outbreak affected this Miami cruise organization. The twelve trailing months of 2024's operating income suggests they have started to bounce back.
Their third-quarter earning release record of $7.9 billion of bookings has exceeded most analyst expectations, which has increased the investors' confidence in the company. As Carnival is ready to get back on track, analysts set higher targets for CCL stock with upgraded ratings to buy.
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