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Buy Carnival Stock before It Makes Another Big Move

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Today at 6:32 AM ET, Carnival (NYSE:CCL) stock rose 11% to $16.00 in the pre-market session. The cruise operator has been benefiting from various positive developments. The number of COVID-19 cases has declined in the US and other developed countries. Investors also cheered the phase-in reopening of various economies and hopes of a new COVID-19 vaccine.

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Carnival stock rose due to positive developments

Novavax (NASDAQ:NVAX), a biotech company, has started the Phase I study of its experimental COVID-19 vaccine candidate NVX-CoV2373. Also, Moderna will likely start the Phase II trial of its coronavirus vaccine candidate mRNA-1273 in July. Carnival’s elderly clientele should feel more comfortable when immunization is easily available.

A report from FXStreet said, “However, another reason for a potential move to the upside comes from reports about insider buying. Randall J. Weisenburger, a Board Director at the firm, increased his stake by 997% in early April and the Saudi Public Investment Fund also chipped in.” The report added, “Perhaps most importantly – especially in comparison to rivals – Carnival has improved its financial position, ensuring it has enough liquidity to work through during these turbulent times.”

First-quarter performance

In the first quarter, which ended in February, Carnival’s total revenues rose 2.5% to $4.79 billion from the first quarter of 2019. The company reported an adjusted EPS of $0.22 compared to $0.49 in the first quarter of 2019. Wall Street analysts expected the company to report an EPS of $0.26 on sales of $4.68 billion.

Wall Street analysts expect Carnival to report an EPS of -$1.45 on revenue of $1.1 billion in the second quarter. Analysts also expect the company’s revenues to fall by 43.6% YoY (year-over-year) in fiscal 2020 to $11.75 billion. The sales could rise by 35.6% YoY in fiscal 2021 to $15.9 billion. Meanwhile, the EPS will likely fall from $4.40 in fiscal 2019 to -$2.30 in fiscal 2020. Analysts expect an EPS of $0.03 in fiscal 2021.

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Analysts’ recommendations for Carnival stock

Currently, four out of 19 analysts have a “buy” recommendation for Carnival stock. Meanwhile, 13 analysts recommend a “hold” and two recommend a “sell.” Analysts have an average target price of $18.03 on the stock. The target price implies a return of 25% based on the closing price of $14.46 on May 22. The consensus target price for the stock has fallen from $23.83 in April—a fall of 24%.

Stock returns

On May 22, Carnival stock fell 0.96% and closed at $14.46 with a market cap of $10.5 billion. The stock has returned -73% in the last 12 months and 24% in the last month. The stock is trading 85.4% above its 52-week low of $7.80 and 73.2% below its 52-week high of $53.86.

On May 22, Carnival stock was trading 3.9% above its 20-day moving average of $13.92. Meanwhile, the stock is trading 12% above its 50-day moving average of $12.91 and 47% below its 100-day moving average of $27.27. The stock’s 14-day relative strength index score of 52 indicates that it isn’t oversold or overbought.

Carnival stock has an upper Bollinger Band level of $16.10, while its lower Bollinger Band level is $11.73. On May 22, Carnival stock closed near its middle Bollinger Band level of $13.92, which indicates that it isn’t oversold or overbought.

On May 22, Royal Caribbean Cruises (NYSE:RCL) and Norwegian Cruise Line (NASDAQ:NCLH) stocks returned -0.5% and -0.9%, respectively.

At 7:30 AM ET today, the S&P 500 futures rose 1.84%, while the Dow futures rose 2.02%.

Read Is Carnival Stock Worth Your Attention Right Now? to learn more.

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