12 Most Undervalued Travel Stocks to Buy According to Hedge Funds

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5) Carnival Corporation & plc (NYSE:CCL)

Forward P/E Ratio as of 13 September: 10.79x

Number of Hedge Funds: 53

Carnival Corporation & plc (NYSE:CCL) owns and operates cruise ships providing cruises to all major vacation destinations such as North America, United Kingdom, Germany, Southern Europe, and Asia Pacific. The company also owns and operates hotels and lodges.

The market experts believe that Carnival Corporation & plc (NYSE:CCL) should see strong revenue and earnings growth from 3 sources. These include scalability, brand intangible assets, and cost advantage. The growth measures are well-supported by the pricing power and scale advantages. As the company focuses on optimizing occupancy, passenger counts and yields are expected to rise at a faster pace than analysts’ expectations.

With European demand and occupancy profiles converging on normalized levels, Carnival Corporation & plc (NYSE:CCL)’s economic performance is expected to improve. The company’s 2Q 2024 results exhibit that consumer appetite for travel remains strong. Also, there has been continued demand, with North America, Australia, and Europe segment booking prices being ahead of 2023 for the upcoming 2 quarters and into 2025.

In 2Q 2024, the company’s net income saw an improvement of ~$500 million as compared to 2023, with adjusted net income outperforming March guidance by ~$170 million. Carnival Corporation & plc (NYSE:CCL) made significant strides in improving its commercial operations, tactically reallocating its portfolio composition, and formulating growth plans.

Given the continued strong demand trends, Carnival Corporation & plc (NYSE:CCL) raised its expectations for the year, with net yields expected to top 10%, propelling the company for double-digit returns on invested capital.

Bank of America upped their target price on the shares of Carnival Corporation & plc (NYSE:CCL) from $23.00 to $24.00, giving it a “Buy” rating on 27th June.

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