Wells Fargo Initiates Carnival (CCL) Coverage with ‘Overweight’ Rating, $37 PT, Cites Attractive Cruise Sector Outlook

Carnival Corporation (NYSE:CCL) is one of the most undervalued NYSE stocks to buy right now. On November 18, Wells Fargo analyst Trey Bowers initiated coverage of Carnival with an Overweight rating and $37 price target. This decision comes as Wells Fargo considers the cruise sector to be the most attractive area within its coverage of gaming, leisure, and lodging companies. The firm anticipates a rapid improvement in ROIC for both individual cruise companies and the industry as a whole. Bowers believes that the TAM for cruises will continue to grow.

In its Q3 2025 earnings report, Carnival Corporation disclosed generating a record adjusted net income of $2 billion, surpassing its pre-pandemic benchmark by ~10%. This translated to an EPS of $1.43, beating Street expectations by $0.11. This achievement came despite a significant financial headwind from a ~600% increase in net interest expense compared to 2019.

The company delivered record revenues and yields, with yields increasing by 4.6% on a same-ship basis driven by strong close-in demand and high onboard spending. The total revenue for the quarter stood at $8.15 billion, which was modestly up 3.25% year-over-year. Furthermore, the company’s ROIC reached 13% for the trailing 12 months. Carnival also raised its full-year guidance for the third time this year, now expecting net income of ~$2.9 billion or $2.14 per share.

Carnival Corporation (NYSE:CCL) is a cruise company that provides leisure travel services in North America, Australia, Europe, and internationally. The company operates through four segments: NAA Cruise Operations, Europe Cruise Operations, Cruise Support, and Tour & Other.

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Disclosure: None. This article is originally published at Insider Monkey.