Carnival (CCL) Stock Drops Despite Market Gains: Important Facts to Note

Carnival (CCL) closed at $26.69 in the latest trading session, marking a -2.15% move from the prior day. This change lagged the S&P 500's 0.21% gain on the day. At the same time, the Dow added 0.22%, and the tech-heavy Nasdaq gained 0.16%.

The cruise operator's shares have seen an increase of 4.24% over the last month, surpassing the Consumer Discretionary sector's gain of 3.95% and the S&P 500's gain of 3.25%.

The investment community will be paying close attention to the earnings performance of Carnival in its upcoming release. The company is forecasted to report an EPS of $1.36, showcasing a 4.9% downward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $8.36 billion, reflecting a 2.59% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.23 per share and revenue of $27.63 billion, indicating changes of -0.89% and +3.79%, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for Carnival. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.02% higher. At present, Carnival boasts a Zacks Rank of #3 (Hold).

Looking at valuation, Carnival is presently trading at a Forward P/E ratio of 12.22. For comparison, its industry has an average Forward P/E of 16.87, which means Carnival is trading at a discount to the group.

We can additionally observe that CCL currently boasts a PEG ratio of 1.2. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Leisure and Recreation Services was holding an average PEG ratio of 1.26 at yesterday's closing price.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 201, positioning it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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