Following Carnival’s (CCL) 4Q15 earnings release, analysts’ consensus estimates remained almost flat. Earnings estimates rose by 0.62% for 1Q16 and fell by 0.26% for 2Q16. For 3Q15 and 4Q15, the estimates rose by 0.3% and 0.4%, respectively.
For 1Q16, Sales are expected to grow by 20% to $801 million. However, EPS (earnings per share) are expected to grow at a much higher rate of 63% to $0.33.
For fiscal 2016, analysts estimate that sales would rise by 14% to $4.8 billion. EPS are expected to rise by ~24% to $3.4.
Analysts are expecting sales growth to slow to 3% for fiscal 2017 and to 15% for 2018. The growth in profitability is also expected to slow going forward. For 2016, analysts are expecting EPS to rise by 16% to $3.9. For 2017, EPS were expected to grow by 8% to $4.2.
Analyst recommendations and target price
Of the 28 analysts rating Carnival’s stock, 58.3%, or 14 analysts, have a “buy” rating, 41.7%, or 10 analysts, have a “hold” rating, and no analysts have a “sell” rating.
The Carnival (CCL) stock’s consensus 12-month price target rose from $57.5 to $59.2. This indicates a 10% return potential. Buckingham Research Group has the highest target price of $68 while Jefferies has the lowest target price of $50.
Barclays retained the “buy” rating on the stock but raised the target price from $54 to $57. HSBC and Zacks Investment Research issued a “buy” rating with target prices of $60 and $56, respectively.
Carnival’s (CCL) competitors include Royal Caribbean Cruises (RCL) and Norwegian Cruise Line (NCLH). CCL forms 4.0% of the WBI Large Cap Tactical Yield Shares (WBIG) and 4.0% of the WBI Large Cap Tactical Select Shares ETF (WBIL).
In the final article, we’ll wrap up this series by looking at CCL’s valuation compared to its peers.
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