Carnival stock price could go parabolic as golden cross nears

Cruise stocks had a strong performance in 2024 as demand continued soaring in key markets. Carnival stock has risen in the last four consecutive months, and is hovering at its highest level since June 2021. Its US stock was trading at $26.80, while its London shares were trading at 1,900p.

Royal Caribbean (RCL) has been the best-performing cruise stock this year. Its stock has soared by over 100%, transforming it into the industry’s biggest company.

Carnival demand is rising

Carnival stock price jumped sharply after the company published strong financial results last week.

These numbers showed that its business was doing well, helped by strong demand and higher prices. 

Its annual revenue surged to a record high of $25 billion, a strong recovery for a company that nearly went bankrupt during the Covid-19 pandemic. These numbers were about 15% higher than in the last financial year. 

The company has also become highly profitable, as it has increased its prices while maintaining low costs. Its net income for the year was $1.9 billion, much higher than its previous guidance by about $130 million. 

Other numbers showed that Carnival’s business continued to perform well. For example, it recorded an operating income of $3.6 billion and an adjusted EBITDA of over $6.1 billion.

The company mostly benefits from the ongoing revenge travel that has existed since the end of the pandemic. Most people who stayed at home and accumulated savings are spending this money on traveling. 

At the same time, many young people have embraced cruising, a leisure activity that was associated with the elderly in the past few years. 

The strong performance has helped Carnival boost its forward guidance since forward bookings have remained high. It expects that its net income for the next financial year will jump by 20% to $2.3 billion as it net yields rises by about 4.2%.

Carnival has continued to experience robust demand for its services. Its numbers showed that the advanced bookings for 2025 have risen to a record, which has helped it to adjust its price movements higher. 

Carnival also benefits from the rising customer deposits, which have jumped to a record high of $6.8 billion. It can use these deposits to earn an additional return by just investing them in high-yielding government bonds before customers come in. 

Carnival has also continued to improve its balance sheet after loading up substantial debt during the pandemic. It repaid $3.3 billion in debt this year, bringing its total repayments in the last two days to over $7.3 billion. These payments have brought its debt load to $27 billion. With its strong cash position, the company can easily cover its $1.5 billion and $2.7 billion maturities for 2025 and 2026. 

Carnival stock price analysis

The weekly chart shows that the CCL share price has done well in the past few months, as we predicted. It has jumped above $19.44, the upper side of the ascending triangle chart pattern, a popular bullish sign in the market.

The stock is about to form a golden cross chart pattern when the 200-day and 50-day moving averages flip each other. This is one of the most popular chart patterns that often leads to more gains.

The stock has jumped above the 23.6% Fibonacci Retracement level. Therefore, its outlook is bullish, with the next point to watch being at $31.57, the highest level on June 2021. A break above that level will lead to more gains to the 50% retracement point at $37.40. 

On the flip side, the bullish view will become invalid if the stock moves below the upper side of the triangle at $19.45.

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