CCL Beats Estimates

Carnival Corporation (NYSE: CCL ) delivered a second-quarter adjusted earnings beat, helped by tighter cost controls, modest yield upside, and lower-than-expected fuel expense. JPMorgan analyst Matthew R. Boss maintained an Overweight rating on Carnival and kept his December 2026 price target unchanged at $43, citing a favorable risk-reward setup. Boss Sees Favorable Risk-Reward Revenue missed estimates, and management lowered its second-half yield outlook.

The company cited Europe’s weakness tied to the Middle East conflict but kept its full-year adjusted EPS outlook broadly intact. Boss said Carnival’s second-quarter adjusted EPS of 41 cents beat Street expectations and topped management’s 34-cent guide. He attributed the upside to better-than-expected net cruise costs per ALBD, excluding fuel, modest net yield outperformance, and lower fuel expense. Cost Savings Support JPMorgan’s View Boss highlighted cost performance as the key positive from the quarter.

0% guidance. 1% year over year in constant currency. 4% estimate. Fuel expense of $595 million also came in below the Street estimate of $637 million and management’s $610 million guide.

Management described the savings as structural, with benefits expected to support earnings through fiscal 2026 and beyond. Europe Yield Reset Remains Key Offset Boss flagged the second-half yield reset as the main offset. 75%. Management linked the reduction to weaker demand for European sailing from the Middle East conflict.

Boss said the yield cut represented a 14-cent EPS headwind, offset by second-quarter flow-through, cost savings and other operational favorability. 2% in the third quarter. 2027 Setup Supports Price Target Boss said Carnival’s fiscal 2027 fundamentals remain intact, with management pointing to continued booking strength and confidence in its multi-year Propel plan. His $43 price target is based on about 10 times JPMorgan’s 2027 EBITDA estimate, broadly in line with Carnival’s pre-pandemic multiple.

Key risks include an economic downturn and significant volatility in fuel and other commodity prices. 21 at the time of publication on Wednesday, according to Pro data. 92 Gas, But Paul Krugman Warns Relief Won't Be Quick: 'It Drifts Down Like Feathers'