Morningstar Rating

Stock Research and Analysis

by Jaime M. Katz, CFA

Bulls Say

Carnival has articulated its willingness to hold pricing at the expense of some occupancy in order to protect the brand image. This could drive faster pricing growth ahead.
As baby boomers retire, 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 promising, with China expecting to surpass 1 million cruise passengers in 2015 (half of whom will travel on a Carnival ship), providing an opportunity for long-term growth with a new demographic. Read more 

Bears Say

Prior cruising accidents like those with the Costa Concordia 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.
Higher 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 when itineraries change, affecting profits. Read more 

Management

Micky Arison, chairman of the board, had been CEO of Carnival Corp. since 1979 and Carnival PLC since April 2003. In 2013, Arnold Donald took over the CEO role from longtime leader Micky Arison, leading to the division of the CEO and chairman roles.  Read more 

Profile

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

Cruise Lines Ready to Set Sail 
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