Bernstein has downgraded Carnival Corporation (NYSE: CCL) to a "Market Perform" rating, with the stock price at $28.39 at the time. Carnival Corporation is a global cruise company that operates a large fleet of cruise ships across several brands. It competes with other major players in the cruise industry like Royal Caribbean Group (NASDAQ: RCL) and Norwegian Cruise Line Holdings (NYSE: NCLH).
The downgrade follows a soft outlook issued by Carnival Corporation. The company states that the war in Iran has disrupted booking trends, as highlighted by the Wall Street Journal. This disruption was particularly significant in the most recent quarter, with the Mediterranean region in Europe being the most affected area for the cruise line's operations.
Adding to concerns, Carnival Corporation's latest earnings report showed mixed results. The company surpassed expectations for Earnings Per Share (EPS), a key measure of profitability. However, it fell short on both sales revenue and its guidance for future performance. This disappointing forecast contributed to a sell-off in the company's stock.
Despite the weaker outlook, Carnival Corporation announced record-breaking financial results for its second quarter, as highlighted by PR Newswire. The company achieved all-time highs in revenues and reported a net income of $537 million. Its adjusted net income reached a record $569 million, an increase of over 20 percent from the previous year.
Chief Executive Officer Josh Weinstein noted that Carnival Corporation overcame "extreme geopolitical headwinds and nearly 30 percent higher fuel costs." The company also accelerated its shareholder returns, buying back over $450 million in stock. Demand remains strong, with its booked position for the second half of 2026 being higher than last year at historically high prices.
