Will Carnival's New Ship Additions Boost Its Competitive Position?

Carnival Corporation CCL is gearing up for a competitive environment, with major players like Royal Caribbean Cruises Ltd. RCL and Norwegian Cruise Line Holdings NCLH continuing to add capacity and enhance offerings. CCL is also advancing its fleet strategy, aiming to reinforce market position through targeted newbuilds and upgrades.

During the second quarter of 2025, the company highlighted several vessel additions and refurbishments designed to drive demand and support pricing. AIDAdiva returned to service after the first phase of the AIDA Evolution upgrade, delivering strong guest feedback and increased onboard spending. The program will extend to six more vessels over the next few years. Two newbuilds for AIDA, scheduled for delivery in fiscal 2030 and 2032, will further strengthen the brand’s presence in Germany.

Carnival Cruise Line is preparing for the 2027 and 2028 arrivals of Carnival Festivale and Carnival Tropicale, both Excel-class ships featuring Sunsation Point, a family-focused water park spanning three decks. These ships will have 70% more interconnecting rooms than earlier Excel vessels.

The company will also welcome Star Princess later this year, building on the successful Sun Princess platform. With only three ships on order over the next four years, CCL maintains moderate capacity growth, allowing room for debt reduction while still enhancing its guest experience.

By combining selective fleet expansion with brand-specific upgrades, Carnival aims to strengthen its competitive edge and capture share in a market where rivals are also ramping up capacity.

Competitive Positioning in the Cruise Industry

Royal Caribbean is expanding its fleet through a steady pipeline of new ships to strengthen demand and pricing. In the second quarter of 2025, Royal Caribbean increased capacity by 6% year over year, with gains driven by new vessels and enhancements to the existing fleet. Net yield growth of 5.2% was evenly split between new hardware and current ships. The upcoming delivery of Star of the Seas in August and the launch of Celebrity Xcel in November are expected to lift fourth-quarter capacity by 10% year over year. Looking ahead, the company plans to add seven ships through 2028, including Legend of the Seas, Icon 4 and Celebrity River, supporting premium yields and global reach.

Norwegian Cruise is pursuing steady fleet growth with a pipeline that supports approximately 29.7% gross capacity expansion by 2028, indicating a CAGR of about 4% from 2023. In the second quarter of 2025, Norwegian Cruise expanded its fleet with the delivery of Oceania Cruises’ Allura, the brand’s eighth ship and second in the Allura Class. Norwegian Cruise also confirmed orders for two additional Sonata Class ships, bringing total orders to 13 vessels across three brands, reinforcing its long-term growth strategy.

CCL’s Price Performance, Valuation and Estimates

Shares of Carnival have gained 33.2% in the past three months compared with the industry’s growth of 8.9%.

From a valuation standpoint, CCL trades at a forward price-to-earnings ratio of 13.96X, significantly below the industry’s average of 18.91X.

The Zacks Consensus Estimate for CCL’s fiscal 2025 and 2026 earnings implies a year-over-year uptick of 40.9% and 13.8%, respectively. The EPS estimates for fiscal 2025 have increased in the past 30 days.

CCL currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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