Jump to content

Carnival stock sails towards earnings after huge rally


MongiIG

Recommended Posts

After an impressive rally this year, can Carnival’s upcoming earnings support further gains?

TradeSource: Bloomberg
 

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 18 September 2023 12:57

Carnival, the largest cruise operator in the world, has certainly faced its fair share of challenges during the pandemic. However, the company's recent performance and recovery efforts are worth noting. Despite the shutdown of operations and heavy borrowing to stay afloat, Carnival has managed to make significant strides in its comeback.

In the second quarter (Q2) of 2023, Carnival achieved record sales of $4.9 billion, a testament to the growing demand for cruises as people eagerly return to this form of travel. The company also reported record deposits of $7.2 billion, indicating a strong level of customer interest and commitment. It seems that price increases have not deterred potential passengers, further bolstering Carnival's recovery.

While losses persist as the company rebuilds, there are positive signs to be found. The net loss of $407 million in the Q2 represents a marked improvement from the over $1 billion loss experienced last year. Additionally, Carnival achieved positive operating income for the first time since the pandemic began, and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $681 million, nearing the upper end of guidance. Looking ahead, the company expects these figures to more than triple in the Q3, with a return to adjusted net profit on the horizon.

It is worth noting that Carnival's long-term debt remains high, standing at $32 billion as of the end of the second quarter. This is a result of the company's need to issue substantial debt to sustain operations during the revenue drought caused by the pandemic. However, Carnival is actively working towards reducing this debt burden and has already made progress, having paid off over $1 billion of its peak debt. Furthermore, the company has taken steps to enhance shareholder value by diluting its share count through equity issuance, but it has also been engaged in share buybacks to counterbalance this.

Overall, Carnival's recovery journey is a compelling story to follow. While challenges persist, the company's record-breaking sales, improving financial performance, and debt reduction efforts indicate a positive trajectory. As the cruise industry continues to rebound, Carnival's ability to adapt and navigate these turbulent waters will be crucial in determining its long-term success.

Carnival analyst ratings, price targets and sentiment

Carnival analystsSource: Refinitiv

Refinitiv data shows a consensus analyst rating of ‘hold’ for Carnival which is expected to publish its Q3 results on 29 September 2023. Analysts show 1 strong buy, 3 buy, 2 hold and 4 sell - with the median of estimates suggesting a long-term price target of 1,183.45p for the share, roughly 6% higher than the current price (as of 18 September 2023).

IG Carnival sentimentSource: IG

IG sentiment data shows that 88% of clients with open positions on the share (as of 18 September 2023) expect the price to rise over the near term, while 12% of clients expect the price to fall. Trading activity over this week shows 100% of sells and this month 54% of sells.

Carnival technical analysis

At the end of July the Carnival share price tried to overcome the 2018-to-2023 downtrend line and 200-week simple moving average (SMA) at 1,332.50 pence but was rejected by these.

The share has then given back around 20% of gains from its 1,376.5p July peak by slipping to last week’s low at 1,059p.

Carnival Weekly Candlestick Chart

Carnival weekly candlestick chartSource: TradingView

Over the past few weeks the Carnival share price has found support around the 38.2% Fibonacci retracement of the April-to-July advance at 1,089p, while still having risen by 87% year-to-date.

The fact that the Carnival share price remains above its 974.20p late June low is encouraging for the bulls and seems to indicate that the past couple of months’ slide is just a retracement in a strong uptrend and not a major bearish reversal.

Carnival Daily Candlestick Chart

Carnival daily candlestick chartSource: TradingView

For a medium-term bottom to be confirmed, however, a rise and daily chart close above the late August high at 1,190.00p would need to occur. Only then could the long-term downtrend line at 1,240p be back in sight. It would need to be exceeded on a weekly chart closing basis for this year’s high at 1,376.50p to be back in the frame.

 

 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • While after all the previous halvings, Bitcoin's price skyrocketed, this halving will be different. This is because now the Bitcoin ETF is in play, which will attract long-term investors, resulting in a decrease in volatility. Bitcoin will most likely still experience a hike and reach new heights, but the returns will not match the previous levels.
    • KO Elliott Wave Analysis Trading Lounge Daily Chart, The Coca-Cola Company, (KO) Daily Chart KO Elliott Wave Technical Analysis   FUNCTION: Counter Trend MODE: Corrective STRUCTURE: Flat POSITION: Minute wave {c} of 2.   DIRECTION: Bottom in wave {c}. DETAILS: With yesterday’s session we’ve had a spike in volume on the bull side, which could make us start thinking the correction is either completed, or soon to be. We have almost reached 1.618 {c} vs. {a}., but more importantly we have reached the base of the leading diagonal in wave 1, where many times support is found.         KO Elliott Wave Analysis Trading Lounge 4Hr Chart, The Coca-Cola Company, (KO) 4Hr Chart KO Elliott Wave Technical Analysis   FUNCTION: Counter Trend MODE: Corrective STRUCTURE: Flat POSITION: Wave (v) of {c}. DIRECTION: Bottom in wave (v). DETAILS: Here on the intraday chart it’s easier to see the five wave move in wave {c} which seems to have unfolded nicely. Looking for a clear sign of a bottom in place.        As of April 18, 2024, Elliott Wave analysts closely monitor the daily and 4-hour charts of The Coca-Cola Company (Ticker: KO) to provide insightful technical forecasts. These Elliott Wave predictions play a crucial role in identifying potential trends and reversal points in the stock's price movement.     * KO Elliott Wave Technical Analysis – Daily Chart* The Elliott Wave analysis on the daily chart of Coca-Cola shows a corrective phase within a flat structure, identified as minute wave {c} of 2. This phase is categorized under a counter trend function, suggesting that the ongoing correction is approaching completion. The recent trading session marked a significant increase in volume on the bullish side, hinting at a nearing end to the correction. Technically, the price has approached the critical 1.618 Fibonacci extension of wave {c} relative to {a}, reaching a key support level at the base of the leading diagonal from wave 1—a typical zone for finding support.   * KO Elliott Wave Technical Analysis – 4hr Chart* On the 4-hour chart, Coca-Cola’s stock exhibits a detailed structure of the corrective phase, clearly depicting wave (v) of {c}. This finer resolution allows for a clearer visualization of the complete five-wave move within wave {c}, indicating the likelihood of a bottom formation. Analysts are keenly observing for definitive signs that confirm the bottom is firmly in place, signaling potential bullish reversals.   Technical Analyst : Alessio Barretta   Source : Tradinglounge.com get trial here!    
    • I came across an interesting new meme token called EPIK that launched on the Solana blockchain earlier this month. It features a playful little duck character and has been gaining traction since its debut. In my opinion, several factors contribute to EPIK's potential. Meme coins naturally attract attention, and EPIK's unique duck character design helps it stand out. Additionally, backing from crypto influencers has fueled market interest. It seems on-chain activity is also picking up steam, with daily TV reaching millions of dollars and the number of holders approaching 10,000. With a strong community presence in both English-speaking and Chinese-speaking communities, a recent listing on Bitget potentially exposing it to a much wider audience, coupled with the potential for further price increases, I believe EPIK is a project to keep an eye on.
×
×
  • Create New...
us