Carnival (CCL) Laps the Stock Market: Here's Why

In the latest close session, Carnival (CCL) was up +1.67% at $26.14. The stock exceeded the S&P 500, which registered a gain of 0.32% for the day. On the other hand, the Dow registered a gain of 0.3%, and the technology-centric Nasdaq increased by 0.66%.

The cruise operator's stock has dropped by 5.2% in the past month, falling short of the Consumer Discretionary sector's gain of 7.58% and the S&P 500's gain of 3.34%.

Investors will be eagerly watching for the performance of Carnival in its upcoming earnings disclosure. 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. Meanwhile, our latest consensus estimate is calling for revenue of $8.36 billion, up 2.59% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $2.23 per share and a revenue of $27.63 billion, demonstrating changes of -0.89% and +3.79%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Carnival. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.02% higher. Carnival is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Carnival is holding a Forward P/E ratio of 11.52. This expresses a discount compared to the average Forward P/E of 16.92 of its industry.

Investors should also note that CCL has a PEG ratio of 1.07 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Leisure and Recreation Services stocks are, on average, holding a PEG ratio of 1.24 based on yesterday's closing prices.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 191, positioning it in the bottom 23% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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

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