Carnival (CCL) Could Be 36% Undervalued On Q3 Earnings Watch

Carnival (CCL) heads into its fiscal third quarter earnings release on September 29 with expectations for slightly softer profit. Revenue forecasts imply modest year over year growth, and fuel costs remain a key watchpoint.

Carnival shares trade at US$22.25 after a 2.1% one day share price gain and a 1.9% seven day share price return, yet recent momentum has been weak, with the 30 day share price return down 13.1% and the year to date share price return down 28.0% ahead of earnings.

Scan beyond Carnival's earnings set up and compare it with a hand picked 31 high quality undervalued stocks that share solid cash generation and balance sheet strength.

Bulls see Carnival’s pullback as a mispricing of a profitable cruise giant, while bears point to lagging returns and execution risks. Which story fits the current valuation and the recent share slide?

Most Popular Narrative: 36% Undervalued

Carnival’s most followed valuation narrative pegs fair value at $34.83, well above the last close at $22.25, which puts the focus firmly on whether the earnings and margin outlook can reasonably bridge that gap.

The rollout of a new, industry-first loyalty program in 2026, which includes rewarding total spend (including co-branded credit card purchases), is expected to deepen customer engagement and retention. This aligns with broad consumer adoption of digital tools for travel planning and booking, fostering lifetime value, enhancing direct marketing efficiency, and, after an initial accounting-related yield headwind, supporting accelerating revenue and yield growth from 2028 onward.

See why 127 investors see Carnival as 36% undervalued.

Result: Fair Value of $34.83 (UNDERVALUED)

Still, the bearish narrative gains traction if geopolitical shocks hit bookings or if Carnival’s sizeable debt burden continues to keep interest costs biting into future flexibility.

Find out about the key risks to this Carnival narrative.

Next Steps

Mixed views on Carnival's setup are clear, with both risk and reward arguments on the table. Move quickly, review the evidence in detail, then weigh the 5 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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