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Down 11%, Is Carnival Stock a Buy? Here’s What I Think After Looking Under the Hood

Hey friends,

I’ve been keeping a close eye on Carnival Corporation (ticker: CCL) lately. You know—the cruise ship giant that owns Carnival Cruise Line, Princess Cruises, and other big names sailing the seas.

Over the past few weeks, the stock has fallen more than 11%. Naturally, that caught my attention. When a stock drops, it can mean two things: something’s going wrong, or there’s a short-term dip that might be a buying opportunity.

So I dug in.

I looked at their earnings, read recent news, studied the stock chart, and even looked at how people feel about traveling on cruises in 2025 and beyond.

Here’s my honest take—written just like how I’d explain it to a curious 12-year-old.

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What’s Going on With Carnival?

Carnival had a tough time during COVID. No one was traveling, let alone boarding cruise ships.

The company had to borrow billions just to stay alive. As you can imagine, that debt didn’t disappear overnight.

Fast forward to today. Ships are sailing again, customers are booking trips, and business looks better.

But even with all that progress, Carnival stock has dropped 11% recently. Why?

Let’s talk about that.

1. The Market is Nervous

Right now, investors are worried about a few big things:

• Interest rates are high, which makes it more expensive for companies like Carnival to pay their debt.

• Fuel prices have been bouncing around. Since ships burn a lot of fuel, that affects costs.

• Recession fears are still in the air. If the economy slows down, fewer people might go on cruises.

So even if Carnival is doing okay, the market doesn’t like uncertainty. Stocks fall when fear shows up—even if the company is still selling tickets.

That’s partly what we’re seeing here.

2. Carnival Still Has a Debt Problem

Carnival borrowed a ton of money during the pandemic. Today, it still owes over $30 billion.

That’s a big number. Just paying interest on that debt eats into profits.

And remember what I said earlier? Interest rates are high. That means Carnival is paying more just to service (maintain) its loans.

Until that debt comes down, investors will worry.

3. But… Revenue is Booming

Here’s the good news: people are cruising again.

Carnival’s recent earnings show that bookings are strong. In fact, they’re hitting record levels in some regions.

They’re also making more money per guest. That’s called “revenue per passenger cruise day”—a fancy way of saying they’re selling more drinks, excursions, and upgrades.

So even with the debt, business is picking up. That’s a good sign.

4. Profit Margins Are Improving

Running a cruise ship isn’t cheap. Think food, fuel, staff, entertainment, and maintenance.

But Carnival has been trimming costs and getting more efficient. That means they’re slowly making more profit from each cruise.

This shows me the company is moving in the right direction, even if they’re not fully out of the woods yet.

5. Wall Street Is Still Split

Some analysts think Carnival is undervalued. Others are more cautious.

Why? Because future profits depend on a few wild cards:

• Can they cut their debt faster?

• Will interest rates drop soon?

• Can they keep ships full during a recession?

Those are fair questions. That’s why the stock is bouncing around.

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6. The Drop Might Be an Overreaction

Sometimes stocks fall just because investors panic. That can be a chance for smart buyers to grab a bargain.

I think this 11% drop might be one of those moments.

The business isn’t broken. Ships are sailing, people are spending, and earnings are improving.

Yes, debt is a problem. But the direction looks positive.

If the market is overreacting, that might be our opening.

7. Here’s How I’d Think About Buying Carnival

Would I rush to dump all my money into CCL stock today? No.

But would I consider nibbling—maybe buying a small amount and watching how the company performs over the next few quarters?

Absolutely.

When a stock is down but the business is growing, it deserves a closer look. Here’s how I personally approach it:

• Step 1: I ask myself, “Would I be comfortable holding this for 3 to 5 years?”

• Step 2: I check if I’m buying a real business—not a hype stock.

• Step 3: I look for trends—are sales rising? Are profits improving?

For Carnival, I’d say “yes” to all three, but with a note of caution.

8. Let’s Talk About the Price

Carnival stock is trading around $14 to $15 per share right now.

Before the pandemic, it was much higher—around $50 in 2018.

Will it go back there? Maybe. But not overnight.

The stock has room to grow if earnings continue improving and debt goes down.

Some analysts have price targets around $20–$22. That’s a solid gain from today’s price.

But it depends on execution. Carnival has to deliver.

9. Dividends? Not Yet.

Carnival used to pay a dividend before COVID. It was one reason many investors liked the stock.

But they had to stop paying it during the pandemic to save cash.

Right now, there’s no dividend. If they bring it back in the next couple of years, that would be a strong signal.

For now, don’t count on getting paid just to hold the stock. This is more of a growth recovery play than an income investment.

10. What Are the Risks?

Every stock has risks. Carnival’s biggest ones are:

• High debt. If rates stay high or the economy weakens, that debt could hurt.

• Health scares. Another outbreak or virus could spook travelers again.

• Competition. Royal Caribbean and Norwegian are also fighting for customers.

And don’t forget the cruise industry isn’t for everyone. It’s a niche market. If travel trends change, Carnival could suffer.

11. Is There a Better Option?

Some investors might prefer Royal Caribbean (RCL), which has less debt and slightly better margins.

Others might look at travel stocks like Booking Holdings or Expedia.

But Carnival is the largest cruise operator in the world. That scale gives it power. And the low price makes it interesting.

It depends on your style. If you like a “value recovery” play, CCL could be worth a small spot in your portfolio.

12. What I’m Personally Doing

I’m not going all-in.

But I’ve added Carnival to my watchlist. If it drops closer to $13 and the next earnings report looks good, I might start a small position.

This isn’t a trade—it’s a long-term play. I’d be willing to hold it for a few years and wait for the turnaround.

And I’ll keep a close eye on debt levels and forward bookings. Those are the key numbers.

13. Final Thoughts — Should You Buy Carnival?

Here’s my honest advice:

• If you’re new to investing, don’t rush to buy a stock just because it’s down.

• If you’re curious about travel stocks, do your homework and compare CCL with other names.

• If you believe in long-term recovery and can handle some risk, a small investment in Carnival could pay off.

But always invest with a plan. Don’t buy just because I’m watching it. Think about your goals, your risk tolerance, and your timeline.

Final Takeaways

If you take nothing else away from today’s issue, let it be this:

A falling stock isn’t always a broken business. Sometimes, it’s just a short-term fear.

Carnival is still in choppy waters, but the ship is sailing forward. There’s potential here—but patience is key.

I’ll keep tracking it, and if something big changes, I’ll update you.

Until then, stay curious, stay cautious, and never invest money you can’t afford to lose.

Thanks for reading!

[Live Life Grow Wealth]

DISCLAIMER

I make no representations, warranties, or guarantees, whether expressed or implied, that the content provided is accurate, complete, or up-to-date. Past performance is not indicative nor a guarantee of future returns.

I am an individual content creator and not regulated or licensed by the Monetary Authority of Singapore (MAS) as I do not provide investment services.

All forms of investments carry risks, including the risk of losing your entire invested amount. Such activities may not be suitable for everyone. You are strongly encouraged to seek advice from a professional financial advisor if you have any doubts or concerns.