Carnival (CCL) Laps the Stock Market: Here's Why

In the latest trading session, Carnival (CCL) closed at $25.78, marking a +1.38% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.54%. At the same time, the Dow added 0.61%, and the tech-heavy Nasdaq gained 0.65%.

The cruise operator's stock has dropped by 10.24% in the past month, falling short of the Consumer Discretionary sector's loss of 5.13% and the S&P 500's loss of 0.8%.

The investment community will be closely monitoring the performance of Carnival in its forthcoming earnings report. The company is predicted to post an EPS of $0.24, indicating a 71.43% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $6.36 billion, showing a 7.13% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.17 per share and revenue of $26.64 billion, which would represent changes of +52.82% and +6.49%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Carnival. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Carnival is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that Carnival has a Forward P/E ratio of 11.74 right now. This signifies a discount in comparison to the average Forward P/E of 18.78 for its industry.

Meanwhile, CCL's PEG ratio is currently 0.52. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. By the end of yesterday's trading, the Leisure and Recreation Services industry had an average PEG ratio of 1.18.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 142, positioning it in the bottom 43% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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