Carnival’s (CCL) Debt Reduction and Yield Growth Win BofA’s Praise

Carnival Corporation & plc (NYSE:CCL) is one of the 20 undervalued momentum stocks that are taking off. Bank of America Securities analyst Andrew Didora has reiterated a Buy rating on Carnival Corp. following the company’s better-than-expected Q2 FY 2025 results, which it announced on June 24. The price target remains unchanged at $31.

Carnival delivered a strong performance in the second quarter (FY ends in November) with Q2 results substantially exceeding consensus, driven by higher net yields and solid cost control. This led to an upward revision in full-year EBITDA guidance by the company. These results also underpin the management’s execution capabilities and ability to deliver on financial targets.

For the second half of 2025, Carnival expects a stable performance which is in line with its earlier guidance. The upcoming launch of Celebration Key, a new private island destination, is expected to support yield growth and strengthen customer engagement.

One of the key positives in Didora’s view is Carnival’s consistent progress on reducing debt. The company has also been focusing on improving its balance sheet and has progressed on this objective to a good extent. Such improvement should support investor confidence and long-term financial flexibility.

Valuation also remains supportive. With the stock still trading below its historical average, BofA sees room for upside as Carnival continues to execute on both operational and financial fronts.

Carnival Corporation & plc is the largest global cruise company and among the largest leisure travel companies. Its portfolio includes world-class cruise lines, including AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Princess Cruises, and Seabourn.

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Disclosure: None.