Carnival's Deposits Hit Records: Can Booking Momentum Continue?

Carnival Corporation & plc CCL delivered a notable milestone in second-quarter 2025, with customer deposits reaching record levels, rising more than $250 million year over year. This development underscores resilient underlying demand and highlights the company’s ability to secure cash inflows well in advance of sailings. Management emphasized that forward bookings remain in line with last year’s record position and at historically elevated price points, providing Carnival with enhanced revenue visibility in the near term.

The surge in deposits reflects the company’s ongoing success in extending the booking window. By lengthening the timeline of commitments, Carnival gains greater flexibility in yield management, enabling it to optimize pricing as itineraries approach departure. This strategy proved effective in the second quarter, where net yields advanced 6.5% year over year, beating guidance by 200 basis points. Both ticket pricing and onboard revenues contributed to the upside, reinforcing the company’s focus on same-ship revenue growth.

Importantly, deposits also strengthen the balance sheet. The advance cash position provides a liquidity buffer that supports ongoing deleveraging efforts. During the second quarter, Carnival improved its net debt-to-EBITDA ratio to 3.7x from 4.1x reported in the previous quarter, aided by a combination of record operating results and refinancing activity. With continued progress toward investment-grade credit metrics, management noted that deposits play a central role in funding operations while simultaneously enabling debt reduction.

Looking ahead, product catalysts are expected to reinforce booking momentum. Carnival’s new private destination in the Caribbean is already generating significant search interest and is expected to provide incremental lift to deposits as sailings commence. With limited new capacity additions through 2026, the company is positioned to emphasize deposit growth and yield optimization as primary drivers of earnings and cash flow expansion.

How It Stacks Up to Competitors Like RCL & NCLH

Royal Caribbean Cruises Ltd. RCL continues to set records on the bookings front. The company reported a strong forward booked position for the remainder of 2025, with both volumes and pricing running ahead of last year’s levels. The strength is broad-based across North America and Europe, and extends into 2026 sailings. Management emphasized that the elevated booking curve is translating into higher advance cash collections, reinforcing liquidity while providing clear visibility into double-digit earnings growth.

Norwegian Cruise Line Holdings Ltd. NCLH is likewise reporting record momentum, with its Advanced Ticket Sales (ATS) balance reaching roughly $4 billion at quarter-end. Management highlighted that forward bookings are meaningfully ahead of prior-year levels in both load factors and price, reflecting continued demand for the company’s global deployment and destination offerings. Management framed the record ATS balance as not only a sign of resilient consumer appetite but also a strategic funding source that supports debt reduction initiatives.

CCL’s Price Performance, Valuation & Estimates

Shares of Carnival have rallied 32.1% in the past three months compared with the industry’s growth of 13.4%.

From a valuation standpoint, CCL trades at a forward price-to-earnings ratio of 14.04X, significantly below the industry’s average of 18.63X.

The Zacks Consensus Estimate for CCL’s fiscal 2025 and 2026 earnings implies a year-over-year uptick of 41.6% and 14.1%, respectively. The EPS estimates for fiscal 2025 and 2026 have increased in the past 60 days.

CCL stock currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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