Carnival Corp (NYSE:CCL) shares are trading lower Thursday afternoon as crude oil held near six-month highs, rekindling worries about rising fuel costs for the cruise operator. Here’s what investors need to know.
- Carnival stock is under selling pressure. What’s driving CCL stock lower?
Oil Rally Fuels Cost Concerns For Carnival
Energy is one of Carnival’s largest variable expenses, so every sustained uptick in crude directly squeezes profit margins and raises questions about the company’s earnings power in the coming quarters.
Crude extended recent gains after Iran–U.S. nuclear talks in Geneva stalled and both sides stepped up military posturing, prompting traders to add a fresh geopolitical “risk premium” into prices.
Benchmark Brent crude climbed above $71 a barrel while WTI pushed into the mid-$60s, and the United States Oil Fund ETF has logged double-digit gains year-to-date. For a fuel-intensive business like cruising, that move effectively raises the break-even level for every sailing.
Higher Fuel Bills Pressure CCL Earnings And Valuation
Carnival buys large volumes of bunker fuel that are closely linked to crude benchmarks. When oil spikes, management can hedge some exposure, but ticket prices and onboard spending can’t be repriced fast enough to fully offset higher fuel bills.
That compresses operating margins, reduces free cash flow available to service Carnival’s substantial debt load and can slow the pace of balance-sheet repair.
Investors, already sensitive to macro headwinds and discretionary-spending risks, often respond by marking down earnings multiples for travel names. As a result, even a modest oil shock can translate into outsized downside for CCL’s share price.
Carnival Trading Above Key Averages
CCL stock is trading 2.3% above its 20-day simple moving average (SMA) and 10.1% above its 100-day SMA, demonstrating longer-term strength.
Shares have increased 22.17% over the past 12 months and are currently positioned closer to their 52-week highs.
The RSI is at 56.82, which is considered neutral territory, while the MACD shows a bullish signal at 0.7990, above the signal line at 0.7505.
This combination suggests that while the stock is not in overbought territory, there is potential for upward momentum.
- Key Resistance: $33.00
- Key Support: $28.00
Carnival Earnings Due Next Month
Carnival Corporation is slated to provide its next financial update on March 20.
- EPS Estimate: 18 cents (Up from 13 cents)
- Revenue Estimate: $6.12 billion (Up from $5.81 billion)
- Valuation: P/E of 16.1x (Indicates fair valuation)
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $35.95. Recent analyst moves include:
- Truist Securities: Hold (Raises Target to $34.00) (Jan. 22)
- TD Cowen: Buy (Raises Target to $38.00) (Jan. 13)
- UBS: Buy (Raises Target to $38.00) (Jan. 12)
CCL Shares Edge Lower Thursday
CCL Price Action: Carnival shares were down 2.58% at $31.70 at the time of publication on Thursday, according to Benzinga Pro data.
Image: Courtesy of Carnival
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