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Carnival Cruise Lines (CCL): A Bull-Case Theory

In this article, we summarize a bullish thesis posted on VIC regarding Carnival Corporation in August when CCL was trading at $16.50. Currently, CCL stock is trading at $24.60, which is near its 52-week high of $24.73. So, CCL stock has gained nearly 50% since the publication of this thesis. Currently, CCL’s PE ratio is 20.07 based on GAAP earnings, dipping to 18.08 on non-GAAP figures.

A luxurious cruise ship sailing the deep blue sea, sun glistening off its decks.

Carnival Cruise Lines (CCL) offers a promising long-term investment case backed by efficient capital allocation, sector-wide tailwinds, and an improving demand outlook. With the pandemic firmly in the rear-view mirror, CCL can now effectively leverage moderate industry capacity growth, strengthened by restrained ship orders and low capital expenditures through 2026. Additionally, the low capex translates into a cumulative free cash flow projection of upwards of $6 billion over 2025 and 2026, which its management plans to use for lowering debt load, looking to regain an investment-grade credit rating by 2026.

Furthermore, Carnival benefits from robust demand drivers, including the sustained “revenge spending” trend, the rising popularity of cruises, and a favorable demographic shift as retiring Baby Boomers and wealthier Gen X travelers continue fueling the industry. Additionally, CCL’s operational improvements, including an evolving landscape towards larger, more profitable ships and streamlining brand management, promise to boost top-and-bottom-line growth for the company.

Moreover, despite the potential concerns over demand volatility and competition from luxury cruises, Carnival’s current low capex phase and ongoing focus on debt reduction effectively marginalize those risks. Also, the thesis anticipates that even with a drop in consumer pricing, CCL’s financial strategy and demand resilience enable it to focus on debt paydown. In the long term, CCL’s exposure to an expanding cruise market, backed by operational improvements and a growing preference for cruising as a travel option, supports a positive growth trajectory. Consequently, Carnival will continue posting healthier margins and substantial debt reduction in the coming years.

While we acknowledge the potential of CCL stock as an investment, we believe that some AI stocks hold greater promise for delivering greater returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CCL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

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Artificial intelligence isn’t science fiction anymore.

It’s the revolution reshaping every industry on the planet.

From driverless cars to medical breakthroughs, AI is on the cusp of a global explosion, and savvy investors stand to reap the rewards.

Here’s why this is the prime moment to jump on the AI bandwagon:

Exponential Growth on the Horizon: Forget linear growth – AI is poised for a hockey stick trajectory.

Imagine every sector, from healthcare to finance, infused with superhuman intelligence.

We’re talking disease prediction, hyper-personalized marketing, and automated logistics that streamline everything.

This isn’t a maybe – it’s an inevitability.

Early investors will be the ones positioned to ride the wave of this technological tsunami.

Ground Floor Opportunity: Remember the early days of the internet?

Those who saw the potential of tech giants back then are sitting pretty today.

AI is at a similar inflection point.

We’re not talking about established players – we’re talking about nimble startups with groundbreaking ideas and the potential to become the next Google or Amazon.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

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Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…