Latest Post

Georgia Tech pitcher Camron Hill selected by the Philadelphia Phillies in the 2024 MLB Draft Back to Compliance: Restoring Tax Exemption for a Charity | Farella Braun + Martel LLP
Why Carnival stock rose 17.7% this week

Shares of Carnival Corp. (NYSE: CCL) rose as much as 17.7% this week after the company reported earnings, according to data from S&P Global Market Intelligence. Shares ended the week up 16.5%.

The profit jump

Carnival’s revenue rose 17.7% to $5.78 billion and earnings per share rose to $0.11 from $0.31 a year ago. The bigger news, however, was the forecast.

Management now expects net profit to increase by 10.25% in 2024, up from the 9.5% forecast in March. And adjusted net income guidance was raised by $275 million to $1.55 billion.

Customer deposits rose to $8.3 billion, $1.1 billion more than ever before.

Carnival’s improvement offset by debt

While Carnival’s operating conditions are improving significantly, the company’s debt remains a challenge. The balance sheet still shows debt of $29.4 billion and interest expenses of nearly $2 billion.

The increase in customer deposits is solid, but the company is using the deposits to pay down debt as it only has $1.6 billion in cash on the balance sheet. Should there be an economic downturn or a drop in bookings, this could quickly turn into a situation where more capital is needed to survive.

The market sees this as positive news, and if trends continue, Carnival will have made an impressive comeback from the pandemic-related closures. But the debt is too high for me to buy the stock, even if Carnival believes it is now on the path to sustained profitability.

Should you invest $1,000 in Carnival Corp. now?

Before you buy Carnival Corp. stock, consider the following:

The Motley Fool Stock Advisor The analyst team has just published what they believe to be The 10 best stocks for investors to buy now… and Carnival Corp. wasn’t one of them. The 10 stocks that made the cut could deliver huge returns in the years to come.

Consider when NVIDIA created this list on April 15, 2005… if you had invested $1,000 at the time of our recommendation, You would have $759,759!*

Stock Advisor offers investors an easy-to-understand plan for success, including instructions on how to build a portfolio, regular updates from analysts, and two new stock recommendations per month. The Stock Advisor Service has more than quadrupled the return of the S&P 500 since 2002*.

View the 10 stocks ยป

*Stock Advisor returns as of June 24, 2024

Travis Hoium does not own any stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.

Why Carnival Stock Soared 17.7% This Week was originally published by The Motley Fool

Leave a Reply

Your email address will not be published. Required fields are marked *