We recently published a list of 12 Best Cruise Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Carnival Corporation & plc (NYSE:CCL) stands against other best cruise stocks to buy according to hedge funds.
Overview of the Cruise Line Industry
The cruise industry is on the path to recovery after plunging during the Covid-19 pandemic. The Cruise Lines International Association (CLIA) reported that around 35.7 million passengers were anticipated to set sail in 2024, reflecting a 6% growth over 2019. JP Morgan reported that major cruise lines globally benefitted from a successful 2024 wave season, which falls between January and March. In fact, JP Morgan iterated that the annual number of cruise passengers is also expected to surpass pre-COVID levels from 2023 to 2027. Matt Boss, Head of Leisure and Retailing at J.P. Morgan, said the following about the optimistic cruise industry outlook:
“An important point underscoring our more constructive view of the cruise industry post-pandemic is market share gains from the larger $1.9T global vacation market and accelerated new-to-cruise customer acquisition. Demand remains robust, with not a single historical lead indicator in the business, notably booking curve and onboard spend, signaling any softening.”
In the past, baby boomers were at the center of the cruise industry’s core consumer base. This trend is, however, changing with the rise of young travelers. According to CLIA, 73% of millennials and Gen X travelers said that they would consider a cruise vacation. According to Grand View Research, the global cruise market had a size of $7.67 billion in 2022. It is anticipated to grow at a compound annual growth rate (CAGR) of 11.5% between 2023 and 2030, primarily due to the rising popularity of cruise vacations among younger demographics. The more affordable nature of these vacations is another significant factor attributed to this growth.
On March 27, investment firm Exane BNP Paribas’ analysts expressed bullish sentiments on the cruise industry’s long-term outlook, stating that they anticipate cruise net yields to rise steadily in 2025 and 2026. The positive outlook was attributed to strong demand and new revenue drivers for the industry, such as private islands. Exclusive destinations such as private islands allow cruise lines the room to upsell guests on experiences at around $125 per day per person. This is a tailwind for cruise companies devising innovative ways to generate more value for cruisers and raise profits.
The firm also highlighted favorable demographics to support its bullish stance, along with the potential to gain market share in the global vacation market worth around $2 trillion. Exane BNP Paribas opined that cruise lines will likely benefit from rising demand and limited supply growth, which are expected to strengthen pricing power. In addition, digital innovations are helping cruise companies grow onboard spending and enhance customer experiences. According to the firm, these factors are likely to lead to more earnings growth for the industry.
Our Methodology
We sifted through stock screeners, financial media reports, and ETFs to compile a list of 20 cruise stocks and chose the top 12 most popular among hedge funds as of Q4 2024. The list is ordered in ascending order of hedge fund sentiment. We sourced the hedge fund sentiment data from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Was Jim Cramer Right About Carnival Corporation & plc (CCL)?
A luxurious cruise ship sailing the deep blue sea, sun glistening off its decks.
Carnival Corporation & plc (NYSE:CCL) is a global cruise and leisure travel company with a portfolio of cruise lines, including AIDA Cruises, Carnival Cruise Line, Princess Cruises, Costa Cruises, Cunard, Holland America Line, P&O Cruises (Australia), and more. Its segments are divided into NAA cruise operations, Europe cruise operations, Cruise Support, and Tour and Other.
The company recently announced an order for two additional new ships for AIDA Cruises, one of Germany’s most popular cruise lines. These multi-fuel-capable ships will be delivered in the first quarter of fiscal years 2030 and 2032, expanding its operations. Carnival Corporation & plc (NYSE:CCL) also has positive operations. In fiscal Q1 2025, it hit high-water marks for revenue, EBITDA, EBITDA per ALBD, operating income, and customer deposits. The company reported over $170 million in net income, surpassing guidance supported by strong demand throughout its portfolio. It also attained a robust 7.3% yield increase, exceeding its yield guidance on top of last year’s 17% yield improvement.
In addition, Carnival Corporation & plc’s (NYSE:CCL) EBITDA reached $1.2 billion for the quarter, approaching a 40% year-over-year increase. Both operating margins and EBITDA margins improved over 400 basis points year over year, surpassing 2019 levels. In a report released on March 31, David Katz from Jefferies reiterated a Buy rating on Carnival Corporation & plc (NYSE:CCL) with a price target of $31.00.
Overall, CCL ranks 5th on our list of best cruise stocks to buy according to hedge funds. While we acknowledge the potential for CCL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CCL but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
