By Peet Serfontein & Khumbulani Kunene
Carnival Corporation is the largest global cruise company and is also one of the largest leisure travel companies with a portfolio of world-class cruise lines. The company operates as a dual-listed company with UK-based Carnival plc forming a single enterprise under a unified executive team. While Carnival continues to recover from operational challenges, such as the Covid-19 pandemic, it remains a leader in the global cruise industry.
Technically the price seems to be at the start of Wave 5 out of the Elliott Wave price analysis, which typically represents the final surge in an overall upward trend. This wave follows the corrective phase of Wave 4, which tends to shake out weak hands and consolidate gains from the prior waves.
The stock is in the markup phase out of the Wyckoff Market Cycle, characterised by higher highs and higher lows, which is a classic indication of an uptrend. The sidewards movement of the on-balance volume indicator also supports our bullish bias.
The stock remains above its 200-day simple moving average of $16.29. This suggests that the longer-term trend is still positive (despite recent downward pressure), which is encouraging.
Share Information
| Share Code | CCL |
|---|---|
| Industry | Tourism Leisure/Arts/Hospitality |
| Market Capital (USD) | 1 22.58 billion |
| One Year Total Return | 19.88% |
| Return Year-to-Date | -2.75% |
| Current Price (USD) | 18.03 |
| 52 Week High (USD) | 19.74 |
| 52 Week Low (USD) | 10.84 |
| Financial Year End | November |
| The stock price continuously fluctuated this year. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | -0.06 | 1.20 | 1.55 | 1.83 |
| Growth (%) | >100 | 29.30 | 18.01 | |
| Dividend Per Share (USD) | ||||
| Growth (%) | ||||
| Forward PE (times) | 15.05 | 11.64 | 9.86 | |
| Forward Dividend Yield (%) | 0.07 | |||
| Earnings over the near-to-medium term are expected to recover strongly, with the company set to maintain its dominant market-share position. | ||||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position | BALL US - Take Profit (Close the position) | HD US - BUY (Continue to hold) | FAST US - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 61.71 | 353.79 | 66.9 |
| Current | 67.22 | 383.24 | 70.59 |
| Movement | +8.9% | +8.3% | +5.5% |
| We exited the trade early to lock-in a profit while reducing portfolio exposure. |
A developing symmetrical triangle pattern remains of interest. Remains above its 200-day simple moving average. Upside price momentum supports the strategy.
Our profit target is $395, with a trailing stop-loss at $365.50. Exit the trade by 11 October 2024. |
Price action that is developing a rising wedge pattern remains of interest. Remains above its 200-day simple moving average. Upside price momentum supports the strategy.
Our profit target is $75.00, with a trailing stop-loss of $67.20. Exit trade by 23 October 2024. |
| Share Name and position | ETN US - Buy (Continue to hold) | AVY US - Buy (Continue to hold) | SSY US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 297.69 | 212.51 | 75.19 |
| Current | 311.73 | 220.20 | 77.78 |
| Movement | +4.7% | +3.6% | +3.4% |
|
Price action that gave a "buy" signal out of the Bollinger Band strategy remains of interest. Remains above its 200-day simple moving average. Fading downside price momentum supports the strategy.
Our profit target remains at $352.00, with a trailing stop-loss at $290.00. Exit the trade by 13 December 2024. |
An upward trend of the Sharpe ratio that suggests a potential improvement in the investment's risk-adjusted performance remains of interest. Remains above its 200-day simple moving average. Fading downside price momentum supports the strategy.
Our profit target remains at $237, with a trailing stop-loss at $210.50. Exit the trade by 6 December 2024. |
A developing symmetrical triangle pattern remains of interest. Remains above its 200-day simple moving average. Upside price momentum remains halted, highlighting a concern.
Our profit target remains at $84.00, with a trailing stop-loss at $74.50. Exit the trade by 6 November 2024. |
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