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Carnival vs. RCL: Which Cruise Stock is the Better Buy Now?
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Key Takeaways
Carnival's Paradise Collection and fleet upgrades drive pricing power and long-term brand positioning
Royal Caribbean expands with Star of the Seas, Celebrity Xcel, and exclusive destination projects.
CCL stock has surged 40.7% in three months, trading at a lower forward P/E than RCL's 19.87X multiple.
Carnival Corporation & plc (CCL - Free Report) and Royal Caribbean Cruises Ltd. (RCL - Free Report) represent two of the largest players in the global cruise industry, yet they are pursuing distinctly different strategies to harness the momentum of the global leisure travel upcycle. Carnival is leveraging its broad multi-brand portfolio, destination-led investments, and ongoing deleveraging to rebuild profitability and restore financial strength, while Royal Caribbean is driving premium growth through industry-leading ships, exclusive private destinations, and digital engagement initiatives.
The comparison between these cruise leaders is especially relevant in today’s market environment, where investors are evaluating travel stocks not just for demand momentum but also for margin sustainability, capital discipline, and balance sheet resilience. Both operators recently posted strong earnings that underscored the sector’s robust recovery and highlighted their respective strengths in yield growth, onboard monetization and forward bookings.
Let’s take a closer look at the fundamentals of the two stocks to determine which stock has the greater upside potential. Let’s find out.
The Case for CCL
Carnival is building momentum through a broad multi-brand strategy, destination-led investments, and structural margin improvements. The company has delivered eight consecutive quarters of record revenues and yields, with second quarter 2025 EBITDA up 26% and operating income up 67% year over year. Management highlighted that EBITDA margins are now at their highest level in nearly two decades, underscoring the success of its commercial execution and cost discipline.
With the launch of Celebration Key in July 2025 and further expansions at Half Moon Cay and Mahogany Bay, Carnival is doubling down on its “Paradise Collection” of Caribbean destinations to enhance demand and drive pricing premiums. Fleet upgrades such as the AIDA Evolution program and new Excel-class ships are also strengthening brand positioning across key markets. Meanwhile, the upcoming Carnival Rewards loyalty program in 2026 is designed to deepen engagement and capture greater customer lifetime value.
However, Carnival still faces near-term cost pressures. Third quarter 2025 cruise costs ex-fuel are projected to rise 7% year over year due to Celebration Key operating expenses, higher advertising spend and timing shifts.
While challenges persist, Carnival’s broad scale, destination strategy, and improved balance sheet trajectory support its recovery story. The company’s progress toward investment-grade credit status and its ability to generate higher free cash flow position it well to deliver sustainable long-term shareholder value.
The Case for RCL
Royal Caribbean continues to focus on its premium-positioned, large-scale model aimed at delivering high-value vacation experiences. The company is executing on its strategy of moderate capacity growth, innovative ship launches, and exclusive destination development to strengthen its global leadership.
With the recent addition of Star of the Seas and the upcoming launch of Celebrity Xcel, Royal Caribbean is enhancing its fleet with cutting-edge designs and premium features. Destination projects such as Royal Beach Club Paradise Island and Perfect Day Mexico are expected to reinforce its brand positioning and drive incremental yield improvement.
The company is also making meaningful progress in digital adoption and loyalty integration. Nearly half of onboard purchases are now made through its mobile app, while loyalty members represent 40% of bookings and spend significantly more per trip, boosting long-term revenue per guest.
However, Royal Caribbean faces near-term margin pressure from elevated operating costs, new ship ramp-up expenses, and higher third-quarter cost expectations. These pressures may temper profitability in the near term.
How Does Zacks Consensus Estimate Compare for CCL & RCL?
The Zacks Consensus Estimate for Carnival’s fiscal 2025 sales and EPS suggests year-over-year increases of 5.9% and 40.9%, respectively. In the past 60 days, earnings estimates for fiscal 2025 have risen 6.4%.
CCL Earnings Estimate Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Royal Caribbean’s 2025 sales and EPS suggests year-over-year increases of 9.1% and 32.2%, respectively. In the past 60 days, earnings estimates for 2025 have increased 1.2%.
RCL Earnings Estimate Trend
Image Source: Zacks Investment Research
Price Performance & Valuation of CCL & RCL
Carnival stock has rallied 40.7% in the past three months, significantly outpacing its industry and the S&P 500’s rise of 19.5% and 11.9%, respectively. Meanwhile, Royal Caribbean shares have gained 43.5% in the same time.
CCL & RCL Stock Three-Month Price Performance
Image Source: Zacks Investment Research
Carnival is trading at a forward 12-month price-to-earnings (P/E) ratio of 14.21X, below the industry average of 19.75X over the last year. RCL’s forward 12-month P/E multiple sits at 19.87X over the same time frame.
Image Source: Zacks Investment Research
End Notes
Carnival emerges as the more compelling choice over Royal Caribbean at this stage, backed by its broader brand portfolio, destination-led growth strategy, and disciplined focus on margin expansion. The company’s structural improvements — including fleet modernization, multi-brand segmentation, and targeted loyalty initiatives — are driving meaningful progress across its global operations.
Carnival’s stronger earnings momentum, upward estimate revisions, and visible path toward investment-grade credit restoration reinforce its position as a scalable and resilient operator. While Royal Caribbean continues to deliver strong margins and a premium product mix, its higher valuation and rising cost base temper its near-term attractiveness.
With a more favorable combination of value, operational leverage, and balance sheet improvement, Carnival appears better positioned to deliver sustainable shareholder returns in the ongoing cruise recovery cycle.
Image: Bigstock
Carnival vs. RCL: Which Cruise Stock is the Better Buy Now?
Key Takeaways
Carnival Corporation & plc (CCL - Free Report) and Royal Caribbean Cruises Ltd. (RCL - Free Report) represent two of the largest players in the global cruise industry, yet they are pursuing distinctly different strategies to harness the momentum of the global leisure travel upcycle. Carnival is leveraging its broad multi-brand portfolio, destination-led investments, and ongoing deleveraging to rebuild profitability and restore financial strength, while Royal Caribbean is driving premium growth through industry-leading ships, exclusive private destinations, and digital engagement initiatives.
The comparison between these cruise leaders is especially relevant in today’s market environment, where investors are evaluating travel stocks not just for demand momentum but also for margin sustainability, capital discipline, and balance sheet resilience. Both operators recently posted strong earnings that underscored the sector’s robust recovery and highlighted their respective strengths in yield growth, onboard monetization and forward bookings.
Let’s take a closer look at the fundamentals of the two stocks to determine which stock has the greater upside potential. Let’s find out.
The Case for CCL
Carnival is building momentum through a broad multi-brand strategy, destination-led investments, and structural margin improvements. The company has delivered eight consecutive quarters of record revenues and yields, with second quarter 2025 EBITDA up 26% and operating income up 67% year over year. Management highlighted that EBITDA margins are now at their highest level in nearly two decades, underscoring the success of its commercial execution and cost discipline.
With the launch of Celebration Key in July 2025 and further expansions at Half Moon Cay and Mahogany Bay, Carnival is doubling down on its “Paradise Collection” of Caribbean destinations to enhance demand and drive pricing premiums. Fleet upgrades such as the AIDA Evolution program and new Excel-class ships are also strengthening brand positioning across key markets. Meanwhile, the upcoming Carnival Rewards loyalty program in 2026 is designed to deepen engagement and capture greater customer lifetime value.
However, Carnival still faces near-term cost pressures. Third quarter 2025 cruise costs ex-fuel are projected to rise 7% year over year due to Celebration Key operating expenses, higher advertising spend and timing shifts.
While challenges persist, Carnival’s broad scale, destination strategy, and improved balance sheet trajectory support its recovery story. The company’s progress toward investment-grade credit status and its ability to generate higher free cash flow position it well to deliver sustainable long-term shareholder value.
The Case for RCL
Royal Caribbean continues to focus on its premium-positioned, large-scale model aimed at delivering high-value vacation experiences. The company is executing on its strategy of moderate capacity growth, innovative ship launches, and exclusive destination development to strengthen its global leadership.
With the recent addition of Star of the Seas and the upcoming launch of Celebrity Xcel, Royal Caribbean is enhancing its fleet with cutting-edge designs and premium features. Destination projects such as Royal Beach Club Paradise Island and Perfect Day Mexico are expected to reinforce its brand positioning and drive incremental yield improvement.
The company is also making meaningful progress in digital adoption and loyalty integration. Nearly half of onboard purchases are now made through its mobile app, while loyalty members represent 40% of bookings and spend significantly more per trip, boosting long-term revenue per guest.
However, Royal Caribbean faces near-term margin pressure from elevated operating costs, new ship ramp-up expenses, and higher third-quarter cost expectations. These pressures may temper profitability in the near term.
How Does Zacks Consensus Estimate Compare for CCL & RCL?
The Zacks Consensus Estimate for Carnival’s fiscal 2025 sales and EPS suggests year-over-year increases of 5.9% and 40.9%, respectively. In the past 60 days, earnings estimates for fiscal 2025 have risen 6.4%.
CCL Earnings Estimate Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Royal Caribbean’s 2025 sales and EPS suggests year-over-year increases of 9.1% and 32.2%, respectively. In the past 60 days, earnings estimates for 2025 have increased 1.2%.
RCL Earnings Estimate Trend
Image Source: Zacks Investment Research
Price Performance & Valuation of CCL & RCL
Carnival stock has rallied 40.7% in the past three months, significantly outpacing its industry and the S&P 500’s rise of 19.5% and 11.9%, respectively. Meanwhile, Royal Caribbean shares have gained 43.5% in the same time.
CCL & RCL Stock Three-Month Price Performance
Image Source: Zacks Investment Research
Carnival is trading at a forward 12-month price-to-earnings (P/E) ratio of 14.21X, below the industry average of 19.75X over the last year. RCL’s forward 12-month P/E multiple sits at 19.87X over the same time frame.
Image Source: Zacks Investment Research
End Notes
Carnival emerges as the more compelling choice over Royal Caribbean at this stage, backed by its broader brand portfolio, destination-led growth strategy, and disciplined focus on margin expansion. The company’s structural improvements — including fleet modernization, multi-brand segmentation, and targeted loyalty initiatives — are driving meaningful progress across its global operations.
Carnival’s stronger earnings momentum, upward estimate revisions, and visible path toward investment-grade credit restoration reinforce its position as a scalable and resilient operator. While Royal Caribbean continues to deliver strong margins and a premium product mix, its higher valuation and rising cost base temper its near-term attractiveness.
With a more favorable combination of value, operational leverage, and balance sheet improvement, Carnival appears better positioned to deliver sustainable shareholder returns in the ongoing cruise recovery cycle.
CCL and RCL carry a Zacks Rank #3 (Hold) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.