Analysts are upbeat on Carnival share price ahead of earnings

Carnival (LON: CCL) share price has made a steady recovery this year as demand for cruise coincided with lower energy costs. The stock soared to a high of 1,141p on Friday, the highest level since May last year. In all, the stock has jumped by over 128% above the lowest level in December last year.

Carnival earnings ahead

Carnival has been one of the best-performing stocks in the FTSE 100 and S&P 500 indices this year. This recovery happened as demand for cruising jumped this year. As a result, many analysts have turned bullish on the stock.

In a recent note, Matthew Boss, an analyst at JP Morgan, said that momentum in the company was not slowing. He decided to upgrade the stock from neutral to overweight, helped by the favourable rik/reward setup. 

Similarly, James Hardiman, an analyst at Citigroup, decided to hike his target for the stock. He believes that there is an elevated interest for cruising among fans after years of lockdowns. His statement said:

“We believe the cruise industry is seeing continued positive momentum that started with the final elimination of COVID restrictions last fall and through Wave Season, with no real signs of abating, a stark contrast to the balance of our leisure coverage.”

One of the top transport and tourism news this week will be the company’s earnings report this week. Analysts believe that the company will have a 33 cents loss on over $4.77 billion of revenue. There is a likelihood that it will beat these estimates since it has outperformed about 50% of the time.

In March, Carnival said that its revenue came in at over $4.43 billion and an EPS loss of -$0.55. Still, the biggest challenge for Carnival is its mountain of debt. It ended the quarter with over $35 billion in total debt. It had over $8 billion in liquidity, meaning it is well-positioned to pay its $1.8 billion in short-term debt this year.

Carnival share price forecast

Carnival chart by TradingView

Is it safe to buy Carnival stock? The daily chart shows that the CCL stock price has been in an upward trend in the past few months. This rally helped it to move above the important resistance point at 930.6p, the highest point on February 7th. It has risen above the 50-day and 100-day exponential moving averages (EMA).

Therefore, there is a likelihood that the stock will continue rising after the earnings. If this happens, the next key level to watch will be the psychological point at 1,200p. A move below the support at 1,000p will invalidate the bullish view.