Shares of the leading cruise line operator have skyrocketed 180% in the last 36 months.
Carnival Corp. (CCL 1.75%) is one of the leaders in the global cruise industry, with multiple brands and more than 90 ships that serve consumers in different corners of the world. Like its peers, Carnival was devastated when its operations were halted to prevent the spread of COVID-19. However, the company has registered strong financial performance in recent years.
This travel stock is trading around $29 per share right now. Can it climb to $40 in 2026? Here’s how investors should think about Carnival as we look at the rest of this year.
Image source: Carnival.
Looking at the past three years
Carnival has a superior track record over the past 36 months, as its share price is up 180% (as of Jan. 15). On an annualized basis, the stock has risen at a 41% yearly clip. Based on these huge gains, investors might have more confidence that the company can keep the momentum going for its investors. It would require a 38% increase for the stock to go from $29 to $40 in about 11 months’ time.
The current valuation supports the bull case. Carnival shares only trade at a price-to-earnings (P/E) ratio of 14.7 at this writing. That’s a huge discount to the 25.7 multiple of the S&P 500 index. Should the stock close the gap halfway with the benchmark, it introduces 37% upside from current levels. That’s an attractive setup for prospective investors.
Carnival’s record financial performance continues
In fiscal 2021, Carnival posted a year-over-year revenue decrease of 66%. And it reported an alarming $9.5 billion net loss that year. Things have improved dramatically in the years since those dark days. The company posted record revenue of $26.6 billion in its last fiscal year (ended Nov. 30, 2025) and record adjusted net income of $3.1 billion.
Onboard spending is a notable trend. This revenue grew faster than ticket sales. And it’s a high-margin moneymaker for the business.
Demand remains robust. Carnival ended the fourth quarter with $7.2 billion in customer deposits, another record. This gives it high visibility into near-term trends. Given that cruises can be 25% to 50% cheaper than land resorts, it makes sense why consumers who have a travel itch would favor what Carnival offers. AAA estimates that 2026 will see another record number of American travelers taking cruises.
The business is expanding its product and service lineup, like with its private destinations. Carnival opened Celebration Key in Grand Bahama last July. And it just announced plans for Ensenada Bay Village in Baja California, Mexico. These give guests unique experiences.
Stronger financial performance has resulted in a cleaner balance sheet. To be clear, though, Carnival still has a significant debt burden that totals $26.6 billion, equating to 69% of the company’s total market cap. But the leadership team pointed out that this figure has decreased by $10 billion from its peak. That’s a huge improvement that’s leading to better bond ratings from credit agencies, which can support lower borrowing costs.
Today’s Change
(-1.75%) $-0.52
Current Price
$28.93
Key Data Points
Market Cap
$38B
Day’s Range
$28.80 – $29.50
52wk Range
$15.07 – $32.89
Volume
397K
Avg Vol
21M
Gross Margin
29.62%
Macro conditions can present uncertainty
Investors looking to allocate capital in the cruise industry specifically and travel sector more broadly should always be thinking about changing economic conditions. Demand for travel can be sensitive to consumer confidence, gas prices, unemployment, and GDP growth. If a large portion of the population is worried about where things are headed, they could easily cut back their spending activity. And this would deal a blow to a company like Carnival that sells a nice-to-have experience and not a necessity.
However, all signs point to 2026 being a solid year for the overall macro backdrop. The Federal Reserve has reduced the federal funds rate rate three times since September. And it’s implementing quantitative easing. These actions spur economic activity.
With Carnival performing well from a fundamental perspective, and the overall economy providing a favorable environment for travel spending, I believe it’s totally possible to see the stock hit $40 before this year is over.
