Carnival Cruise Lines: Interest Payments Will Continue To Pressure Bottom Line

Summary

• In 3Q24, CCL generated $7.89 billion and $1.7 billion in revenues and net income respectively, representing a year-on-year growth of 15.20% and 61.55% respectively.
• Multiple indicators suggest that overall demand in the cruise industry remains strong and will continue to serve as tailwinds for the company.
• Paying down debt is CCL's utmost priority; it is an achievable but challenging task. CCL must manage its liquidity tactically. Fortunately, customer deposits stand at a high of $6.4 billion.
• Valuation analysis suggests that upside potential is limited as the company's bottom line is significantly affected by interest payment.

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Introduction

Carnival Cruise Lines (NYSE:CCL) is a cruise operator headquartered in Miami, Florida. Currently, the company has 104 full-time employees with approximately 92 ships. Additionally, CCL has a diverse portfolio of cruise lines; some of these brands are Carnival Cruise Lines, Princess Cruises, Holland America Line, Costa Cruises, AIDA

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in CCL over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.