Carnival Corporation shares witnessed a substantial increase on Thursday, contrasting with a broader market decline. This positive performance is primarily driven by an uplift in investor confidence across the cruise sector, following the strong fourth-quarter financial results reported by Royal Caribbean Cruises. The industry appears to be rebounding with renewed vigor, as evidenced by encouraging demand indicators and favorable future projections.
The significant upward trajectory of Carnival's stock appears to be a direct consequence of the optimistic outlook generated by Royal Caribbean Cruises' latest earnings announcement. Despite a downturn in major market indices such as the Nasdaq and S&P 500, Carnival's robust performance underscored a growing belief in the cruise line's financial health and future prospects. Royal Caribbean's report, released earlier on Thursday, confirmed that the company not only met but, in some areas, exceeded financial analysts' expectations, signaling a healthy and expanding market for sea-based vacations.
Royal Caribbean's strong financial showing for its fourth quarter was particularly impactful. The company disclosed adjusted earnings per share of $2.80, aligning perfectly with expert predictions. More crucially, the report highlighted a vigorous demand for cruise experiences, reflected in a net yield growth of 3.1%. This growth was supported by a 2.9% increase in net per diem and an expanded occupancy rate, which rose by 20 basis points year-over-year to an impressive 107.8%. Furthermore, the company recorded total revenues of $4.259 billion for the period, reinforcing its strong operational performance.
Looking ahead, Royal Caribbean's management provided an encouraging forecast for fiscal year 2026, projecting adjusted earnings between $17.70 and $18.10 per share, surpassing the Street's consensus of $17.66. Jason Liberty, the CEO of Royal Caribbean, noted that the positive momentum is intensifying into 2026, emphasizing that consumers continue to prioritize and invest in their vacation offerings. This positive sentiment from a leading competitor has clearly cascaded to Carnival, as investors anticipate similar trends and successes within the broader cruise industry.
Investors are also keenly awaiting Carnival's upcoming earnings report, scheduled for March 20. Analysts project an earnings per share of $0.18, an increase from $0.13 year-over-year, alongside an expected revenue of $6.12 billion, up from $5.81 billion. With a price-to-earnings ratio of 14.2x, the stock currently presents a potential value opportunity. Various analysts have recently updated their ratings and price targets for Carnival, with several firms, including Truist Securities, TD Cowen, and UBS, either maintaining or raising their targets, reflecting a generally bullish stance on the company's future. On Thursday, Carnival shares were trading up by 6.96% at $30.72, while Royal Caribbean shares saw an even more significant rise of 14.15%, reaching $332.85, underscoring the market's enthusiasm for the cruise sector.