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Carnival (CCL) Ascends While Market Falls: Some Facts to Note

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Carnival (CCL - Free Report) closed the latest trading day at $23.63, indicating a +1.77% change from the previous session's end. This move outpaced the S&P 500's daily loss of 0.5%. Meanwhile, the Dow gained 0.08%, and the Nasdaq, a tech-heavy index, lost 1.21%.

Heading into today, shares of the cruise operator had lost 8.65% over the past month, lagging the Consumer Discretionary sector's gain of 10.12% and the S&P 500's loss of 0.47% in that time.

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 $0.02, indicating a 114.29% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $5.75 billion, showing a 6.34% escalation compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.77 per share and a revenue of $26.01 billion, signifying shifts of +24.65% and +3.97%, respectively, from the last year.

It is also important to note the recent changes to analyst estimates for Carnival. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.85% upward. Currently, Carnival is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, Carnival is presently being traded at a Forward P/E ratio of 13.1. For comparison, its industry has an average Forward P/E of 19.76, which means Carnival is trading at a discount to the group.

It's also important to note that CCL currently trades at a PEG ratio of 0.69. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Leisure and Recreation Services industry had an average PEG ratio of 0.69.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 48, which puts it in the top 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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