Is Market Overlooking CCL Right Now?

Here is why we think Carnival (CCL) deserves consideration as a value stock.

• Reasonable Revenue Growth: 10.8% LTM and 81.1% last 3 year average.
• Cash Generative: Nearly 10.8% free cash flow margin and 16.2% operating margin LTM.
• No Major Shocks: CCL has avoided any large revenue collapses.
• Modest Valuation: Despite encouraging fundamentals, CCL trades at a PE multiple of 15.5
• Opportunity vs S&P: Compared to S&P, you get lower valuation, higher revenue growth, and lower margins

Carnival operates leisure cruise travel to around 700 ports globally through multiple brands, serving markets in the US, Canada, Europe, Australia, New Zealand, Asia, and beyond.

*LTM: Last Twelve Months

But do these numbers tell the full story? Read Buy or Sell CCL Stock to see if Carnival still has an edge that holds up under the hood.

That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure

Stocks Like These Can Outperform. Here Is Data

For 65 similar value stocks chosen as of mid 2024, consider the following stats for the subsequent 1 year period.

• Average peak return of 39.3% vs 14.4% for S&P, with maximum peak return of 133%
• Win rate of 60%; win rate represents % of stocks with positive return
• Average 1-year return of 14.6%, similar to S&P’s despite tariff instability

But Consider The Risk

That said, Carnival (CCL) isn’t immune to big market drops. It plunged around 65% in the Dot-Com crash and nearly 69% during the Global Financial Crisis. The 2018 correction trimmed it by about 41%, while the Covid pandemic hit hardest with an 84% slide. The recent inflation shock also caused a steep drop of nearly 80%. Even with positive fundamentals, steep sell-offs are part of the risk. When turmoil hits, even strong tailwinds can’t fully protect stocks like CCL.

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read CCL Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.