Morningstar Rating

Stock Research and Analysis

by Jaime M. Katz, CFA

Bulls Say

Carnival has only two ships in total for delivery in 2014 and 2015 across its brands. Fewer ships entering the market helps better match supply with demand, supporting premium cruise pricing.
As baby boomers enter retirement, they are likely to pursue more leisure travel. The cruise lines are positioned to benefit as they seek to capture the increased leisure dollars spent.
The nascent Asia-Pacific market is just beginning to show interest in cruising, providing an opportunity for long-term growth with a new demographic. Read more 

Bears Say

Prior cruising accidents like those with the Costa Concordia, Costa Allegra, and Carnival Triumph could continue to weigh on the brand image and pricing leverage, as new cruisers remain hesitant to try the cruise product. Fewer new cruisers lead to fewer repeat cruisers.
A persistent increase in commodity prices, particularly in energy and food, could affect profitability, even with the implementation of a fuel hedging policy.
Although Carnival has benefited from sourcing cruisers globally, political turmoil may cause cruise cancellations as itineraries change, affecting profits. Read more 

Management

Micky Arison, chairman of the board, had been CEO of Carnival Corporation since 1979 and Carnival PLC since April 2003. In 2013, he turned the CEO role over to Arnold Donald, dividing the CEO and chairman roles. We generally prefer the separation of   Read more 

Profile

Carnival is the largest global cruise company in the world, with 100 ships on the seas. Its portfolio of brands includes Carnival Cruise Lines, Holland America, Princess   Read more 

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