Carnival 2Q26: Clearing the decks

Research evidence excerpt

Carnival 2Q26: Clearing the decks

24 June 2026

Richard J. Clarke, FCA

+44 20 7676 6850

Global Hotels & Leisure richard.clarke@bernsteinsg.com

Carnival Corp Niall Mitchelson

+44 20 7676 7144

Rating niall.mitchelson@bernsteinsg.com

Market-Perform Lasith Siriwardana

Price Target +44 20 7550 2191

lasith.siriwardana@bernsteinsg.com

CCL 28.70 USD

This was undeniably a soft quarter for Carnival; any in quarter strength was overshadowed

Close Date 23 Jun 2026

by a 100bps downgrade to 2026 yield guidance - the first post-pandemic. This has driven

CCL Close Price (USD) 28.72

concerns on demand, particularly when paired with a decelerating yield cadence through

Price Target (USD) 28.70

2026. However, to us Q2 looks more like a reset. Carnival reported Q1 a month earlier than

Upside/(Downside) (0)%

peers, only 1 month into the ME conflict. With additional data the reset downwards reflects

52-Week Range 34.03/23.45

a more similar ME impact to RCL, which had the benefit of an extra month of the conflict

SPX 7,365.46

before guiding. Following the yield reset the story now looks more compelling; optically Q4

FYE Nov

yield growth looks a deceleration, but adjusting for loyalty it implies an underlying ~80bps

Div Yield 2.1%

acceleration, 2027 bookings look robust (& 27H2 will face soft comps), and fuel headwinds

Market Cap (USD) (M) 39,404

are likely to continue to cool. Carnival is also highly cash generative on an unchallenged

EV (USD) (M) 63,348

valuation - trading at a >10% 2027 FCF yield. This is being returned to shareholders, and

more than 1% of CCL’s market cap was bought back in Q2 alone - as a result, despite low Performance YTD 1M 6M 12M

capacity growth, we model mid-high teens EPS growth across 27/28. For now, we remain on Absolute (%) (6.0) 10.5 (8.1) 11.8