The past few days have been quite a smooth cruise for Carnival (NYSE: CCL)(NYSE: CUK) stock. Powered by solid quarterly results, investors and pundits alike have become notably more bullish on the storied cruise line operator’s potential. One of the latter group, in fact, thinks the shares have upside approaching 40%.
A bull gets more bullish
Just after those results were published, Macquarie analyst Paul Golding added $1 to his Carnival price target for a new level of $25 per share while maintaining his recommendation of outperform (buy, in other words). At the stock’s most recent closing price, that new target anticipates 36% upside.
The cruise industry is hot these days; it seems that post-pandemic rush to get out of the home and travel is becoming a long-tail trend. Folks have the money and time to go wandering, and companies like Carnival offer a relatively easy, fun way to escape for a little while.
In his latest analysis, Golding waxed bullish about the “solid” fundamentals Carnival posted for its fiscal second quarter. He added that demand should continue to be robust, helping to power revenue and profitability higher.
Riding the wave
These days, it isn’t hard to be enthusiastic about Carnival (and, more broadly, the cruise segment as a whole). It’s riding a monster wave of demand that might not crest anytime soon.
Those second-quarter results were impressive no matter how you slice them. Revenue surged 18% higher year over year (to nearly $5.8 billion), while non-GAAP (adjusted) net income went from a $0.31 per-share loss in last year’s quarter to a profit of $0.11.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.
Carnival Stock Has 36% Upside, According to 1 Wall Street Analyst was originally published by The Motley Fool
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