Carnival Hits New 52-Week and 5-Year High: Time to Abandon Ship?

It’s Christmas Eve and Santa’s on his way. I hope you’ve completed all your shopping. The malls will be full of stressed-out last-minute shoppers. 

Thankfully, my wife and I spent most of our Christmas dough on this past summer’s vacation in Europe. Tomorrow will be a time to relax and enjoy family and friends. I hope you do the same. 

In yesterday’s trading, the NYSE’s new 52-week highs outdid the 52-week lows, 125 to 47. On Nasdaq, the tables were turned, with new 52-week lows at 214, considerably higher than the 166 new 52-week lows. 

Among the high-volume new 52-week highs on the NYSE was Carnival (CCL), one of the big-three cruise line operators, up 27% year-to-date, hitting its 19th new 52-week high of the past 12 months at $32.89. 

While its share price is nowhere near its January 2018 all-time high of $72.70, the stock’s valuation metrics have become expensive in 2025, much like those of most S&P 500 stocks.

It’s tempting to let your winners ride. However, choppy waters lie ahead in 2026. It might be time to take profits and move into something else here on land. 

Have a Merry Christmas if you celebrate the holiday. If not, enjoy the three NFL games on TV tomorrow. 

How Overvalued Is CCL Stock?

The best way to answer this question is to compare its current valuation metrics with those from 2018, when it reached an all-time high.

For example, its enterprise value today is $67.61 billion, 2.54 times its revenue, according to S&P Global Market Intelligence. In 2017, the fiscal year leading up to the January 2018 all-time high of $72.70, the EV/revenue multiple was 27% higher at 3.22x.

The company’s current enterprise value is 8.83 times its EBITDA (earnings before interest, taxes, depreciation and amortization). At the end of 2017, it was 11.13x, 26% higher than at the end of 2025.

Cruise ships aren’t cheap to build. Therefore, debt is a significant part of the capital structure. 

As of Nov. 30, its total debt was $27.99 billion; in 2017, it was about one-third less at $9.22 billion. At the same time, Carnival’s 2025 EBITDA was $7.24 billion, a company record. In 2017, it was $5.08 billion. 

Carnival’s total debt today is 3.87 times EBITDA;  in 2017, it was 1.81 times total debt, or less than half what it is today. It’s not surprising, then, that its Altman Z-Score in 2017 was more than double what it is today -- 2.89 to 1.23, with 1.23 considered distressed. 

In fairness to Carnival, its two major competitors, Royal Caribbean Cruises (RCL) and Norwegian Cruise Line Holdings (NCLH), have Altman Z-Scores of 2.12 and 0.39, respectively. Royal Caribbean remains my favorite of the three because its balance sheet is healthier, and pardon the pun, it runs a tight ship.

If 2017 and 2018 were the heyday for Carnival, 2025 and beyond would have to be a strong runner-up, which suggests that its fair value is somewhere between $31 and $72.

That appears to make Carnival a reasonable buy in these overheated markets. 

The Analysts Like Carnival

Of the 25 analysts rating CCL stock, 19 give it a Buy (4.48 out of 5), with a target price of $36.35, 16% higher than its current share price. RCL has a 4.40 rating out of 5, while NCLH has a 4.13 rating. 

The cruise industry continues to provide an excellent combination of a good travel experience at a reasonable price for most leisure travelers. That bodes well for continued revenue and profit growth across the entire industry, not just Carnival.

“Cruising has clearly become a mainstream vacation alternative…. And the good news is the price to experience ratio to land-based alternatives is still at a ridiculous value and provides enormous headroom for many years to come,” Carnival CEO Josh Weinstein said in the Q4 2025 conference call. 

Carnival reported its Q4 2025 results on Dec. 19. 

Although its fourth-quarter revenue of $6.33 billion was $40 million shy of analyst estimates, it was 6.6% higher than Q4 2024. On the bottom line, it earned 34 cents a share, nine cents higher than the Wall Street consensus. Lastly, its operating margin in the quarter was 11.6%, 220 basis points higher than a year ago. 

In the company’s Q4 2025 conference call, it said that bookings for the next two years are at record levels, with customer deposits hitting an all-time high. 

The cruise industry is known to make hay while the sun shines, so expect revenues and profits to continue to move higher through the end of 2027. 

That should be very good for CCL stock, which jumped 14% on Dec. 19 after reporting strong results for the final quarter of 2025. 

The Bottom Line on Carnival Stock

I have always been bullish about cruise stocks. 

During COVID and a couple of years after, the troubles the industry faced almost broke it, but I knew once people started spending again, it wouldn’t be too long before revenues were back to those achieved in 2019. Sure enough, the additional capacity brought onstream has delivered revenues that are even greater than before COVID. 

Barring some other economy-crippling unforeseen event, it’s not hard to imagine CCL stock doubling over the next five years, close to its all-time high. 

Here’s what I said in June 2023 about RCL:

“If the demand keeps up for the next 12-24 months and it gets its operating margins back to where they were pre-pandemic, $94 will appear very cheap for RCL stock,” I wrote on June 14, 2023.  

“Whether you’re looking at RCL, CCL, or NCLH, their stocks have more room to run in the second half of 2023.”

RCL is up 213% in the 18 months since; NCLH is up 35%, and CCL has gained 139%. 

Royal Caribbean remains the best of the three in my opinion, but you shouldn’t go wrong with CCL over the next 18 months under normal economic conditions.

When it comes to Carnival stock, it is definitely not the time to abandon ship. It provides fair value at current prices.