On Wednesday, Goldman Sachs initiated coverage of Carnival Corporation (NYSE:) with a Buy rating and a $20.00 price target. The investment firm highlighted several factors contributing to Carnival’s favorable 2024 outlook. These include expectations for the company’s conservative outlook despite a stronger occupancy recovery expected, especially due to its higher exposure to Europe.
Goldman Sachs pointed to improved brand and late-stage earnings, as well as managed supply growth, as additional positive indicators.
Carnival’s upcoming investment in private islands was also cited as a significant catalyst for growth. The company’s throughput is expected to increase from approximately 5.7 million in 2023 to approximately 10 million by 2028. Specifically, Celebration Key is expected to contribute approximately 1.8% to net margin growth and $100 million to EBITDA year over year.
The financial institution further commented on Carnival’s financial position, forecasting a significant improvement in its balance sheet. Goldman Sachs estimates that Carnival aims to reduce its leverage from 6.7 times as of fiscal 2023 to less than 3.5 times by fiscal 2026. cruise operator.
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