Argus Boosts Carnival Target to $35 After Stock Falls 5% on Fuel, Currency Headwinds
CCL•Carnival posted Q2 revenue of $6.66 billion, net income up 21% and $9 billion deposits, but shares fell 5% on a 30% fuel-cost rise and $73 million currency headwind for Q3. Argus raised its target to $35, implying over 20% upside, while Jefferies keeps a Buy rating and forecasts $9 billion FCF through 2027.
1. Q2 Financial Results
Carnival reported second-quarter revenue of $6.66 billion with net income rising 21% year-over-year and customer deposits reaching $9 billion, driven by strong passenger yields and booking trends. Despite robust top-line growth, shares declined 5% following cautious forward guidance.
2. Q3 Guidance and Headwinds
Management projected a 30% increase in fuel costs and a $73 million currency headwind for the third quarter, attributing the impact to higher energy prices and foreign exchange fluctuations. These factors prompted downward revisions to volume and pricing expectations for upcoming cruises.
3. Analyst Outlook and Price Targets
Argus increased its price target from $30 to $35, signaling a 21.34% upside, while Jefferies maintained a Buy rating and forecasts over $9 billion in free cash flow through fiscal 2027. Analysts view these headwinds as temporary and expect long-term demand resilience in the cruise market.
