Trade the Carnival share!
CARNIVAL

Analysis before buying or selling Carnival shares

Trade the Carnival share!
BUY   SELL
79% of retail CFD accounts lose money - eToro.com
 
Chart provided by Tradingview

Before starting to speculate on the Carnival share price you should first ensure you can complete a comprehensive analysis of this asset by using pertinent and reliable stock market data. In this article we offer assistance relating to the stock market and economical information you will need to successfully complete your analyses. Here we will explain the factors you should follow for your fundamental analysis including information relating to the company’s activities, its major competitors and recent partnerships this company has implemented.  

Elements to consider before selling or buying Carnival shares

Analysis N°1

We would notably follow operations implemented by Carnival with the objective of diversifying its activities in the luxury travel sector that would enable a higher profitability and a more advantageous pricing strategy.

Analysis N°2

The purchase and construction of new cruise ships are also promising signs of the company’s growth and would enable it to respond to a higher demand.

Analysis N°3

Merger or partnership operations with other companies of all sizes are also events to follow regarding your fundamental analysis of the Carnival share price.

Analysis N°4

We would also monitor operations aimed at promoting the penetration of certain promising markets such as the emerging markets in Asia where demand is increasing.

Analysis N°5

All the events susceptible to impact tourism are also important such as border crossing restrictions, pandemics or climatic catastrophes.

Analysis N°6

The fiscal regulations should also be studied closely as Carnival has already reaped the benefits of certain loopholes to pay less tax. The same is true for environmental regulations that could represent a setback to the company activities.

Trade the Carnival share!
79% of retail CFD accounts lose money. This is an advert for trading CFDs on eToro

General presentation of Carnival

We shall now continue with a review of the Carnival Company’s activities and its different sources of revenue. This will assist you in anticipating the challenges to its future growth.

The Carnival Group is an American company specialised in the cruise ship sector that owns and operates a number of related brands including Carnival Cruise Line, Holland America Line, Princess Cruises, Seabourn, Cunard, AIDA Cruises, Costa Cruises, P & O Cruises and P & O Cruises Australia.

To better understand the group’s activities it is possible to divide them amongst a number of sectors depending on the amount of turnover generated in each way:

  • The sale of cruises represents the major part of this company’s activities with 98.1% of its turnover. This particularly relates to the sale of tickets and the optional services available aboard the cruise ships.
  • The remaining 1.9% of this company’s turnover is from the sale of holidays in Alaska and Canada through its travel agents Holland America Tours and Princess Tours.

The Carnival group currently operates a fleet of 104 cruise ships with a total capacity of 236,910 passengers.

It can also be advantageous to know the geographical distribution of the Carnival Group’s revenue that is generated as follows: 55.2% of this company’s turnover is from North America, 30.4% in Europe, 12.6% in Australia and Asia and 1.8% from the rest of the world.

Analysis before buying or selling Carnival shares
Trade the Carnival share!
79% of retail CFD accounts lose money. This is an advert for trading CFDs on eToro

The major competitors of Carnival

Although Carnival is currently one of the international leaders in the cruise sector there are a few serious major competitors to this company that you should monitor closely for your analyses of this company. These are the major competitors to Carnival:

Marriott International

This American company is also specialised in cruises as well as the hotel sector and mainly exercises its activities in North America and Pacific Asia.

Royal Caribbean Cruises

This group holds second position worldwide in the cruise ship sector with activities under the following brands


The major partners of Carnival

Carnival therefore has some serious competitors on the market but can also count upon certain allies. Here for example is a recent strategic partnership that the group implemented which significantly influenced its stock market share price:

CSSC

This partnership was implemented by CSSC, the China State Shipbuilding Corporation, with the creation of a joint venture named CSSC Carnival Cruise Shipping. The Chinese Group thereby held the majority of the capital in this joint venture and purchased two cruise ships from Costa capable of transporting 2,000 passengers with the option of ordering other ships that would be built in China. The programme also included two firm purchases from the Shanghai shipyard with an initial delivery in 2023 and an option for two new ships. It should be noted that CSSC also signed concurrently a partnership with the Italian company Fincantieri still with the objective of creating a joint company for the construction of cruise ships which would enable the creation of Chinese cruises.

Trade the Carnival share!
79% of retail CFD accounts lose money. This is an advert for trading CFDs on eToro
Positive factors for Carnival shares
The factors in favour of a rise in the Carnival share price:

If you want to know how Carnival Group's stock is likely to perform over the long term, you need to know how the company is able to sustain its growth and cope with certain external events. To do this, it is best to know the strengths and weaknesses of the company, which we will now explore in detail.
Let's start with a summary of Carnival Group's main strengths, which correspond to as many advantages for its share price:

  • First of all, the Carnival Group remains one of the largest companies in its sector of activity with a current fleet of more than 81 cruise ships. This allows it to compete effectively.
  • Another major advantage of the group is its geographical diversification. Indeed, the group's market share in certain European countries is impressive, with 47% in the United Kingdom, 68% in Italy, 51% in Germany and 45% in France.
  • Another of the company's strengths is its financial health and balance sheets. Indeed, the company is currently one of the most profitable in the world in terms of turnover and shows solid and stable balance sheets over time.
  • The group's acquisition strategy can also be considered particularly profitable with investments in various advertising media and a strong media presence. The group also does not hesitate to use slogans that are easily recognisable to the general public for its cruises.
  • The group also has a well-honed growth strategy and continues to plan to serve new destinations around the world with hubs in more and more ports that attract tourists.
  • Finally, we can also add to the list of these assets, the fact that the Carnival group is also a recognised and reliable brand. Indeed, the brand image of the group is rather positive throughout the world and customers are generally satisfied with the services offered.
Negative factors for Carnival shares
The factors in favour of a drop in the Carnival share price:

Now that we have discovered the main strengths of the Carnival group in its sector of activity, we are going to take a closer look at its shortcomings with the main weaknesses that can penalise its growth and the rise of its share price:

  • First of all, and despite its generally attractive and satisfactory balance sheets, the Carnival group is one of the business sectors that has suffered the most during the Covid crisis and global pandemic, with a sharp drop in its turnover in 2020 and 2021.
  • The fact that the group's revenues are reported in US dollars may also be a drag on the company's profitability. This makes it highly sensitive to fluctuations in the foreign exchange market, and when the dollar is too strong, this can lead to a drop in its revenues due to a negative exchange rate.
  • Still on the subject of the main weaknesses of this company and therefore of its stock market share, it is worth noting that, despite the fact that Carnival generates part of its revenues in Europe, it remains strongly dependent on the American market and on customers in this country, since it still generates more than half its turnover there today.
  • Still because of the Covid pandemic, which hit this sector hard, the group had to part with some of the ships in its fleet, which greatly reduces its capacity to generate significant new turnover in the years to come and at the same time reduces the chances of its share price rising.
  • Still among the elements detrimental to the growth of this company, we also note that the upturn in the price of oil and therefore of fuel, leads to a significant increase in its costs, which is reflected in the prices of its cruises and can thus slow down travellers who do not have sufficient financial means.
  • Finally, it should be remembered that the group's brand image has been badly damaged by the sinking of one of its cruise ships in Italy. Carnival is still facing a strong distrust from potential passengers and the impact of this disaster on its sales is still important in 2021 despite the efforts made by the company to ensure the safety of its future passengers.

Finally, based on the elements we have just reviewed, it appears that Carnival Group has great specific strengths but also has some weaknesses that you should consider when performing your fundamental analysis of this stock and before buying it.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

How to complete a technical analysis of the Carnival share price?

To create a pertinent technical analysis of the Carnival share price it is strongly recommended that you use a personalised stock market chart that enables you to choose the period of analysis and can display certain technical indicators simultaneously. We particularly recommend the trend and volatility indicators such as the MACD or mobile averages as well as the reversal points such as the pivot points and the support and resistance levels.

Which financial elements should be analysed for Carnival shares?

Of course, a financial analysis of the Carnival Group is also important if you wish to invest in this asset. Here we would notably draw your attention to the publication of this company’s financial results, annual and quarterly. You will need to compare the true results of the group with the objectives fixed by the company and the analysts’ projections to be able to be more precise regarding the probable forthcoming trends of the company’s share price. You could also compare these figures to those of its competitors.

Trade the Carnival share!

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail CFD accounts lose money. You should consider whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.

Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.