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Carnival vs. Norwegian Cruise: Which Stock Is Poised to Outperform?
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Key Takeaways
Carnival delivered record 2025 revenues, EBITDA and net income on stronger pricing and onboard spending.
CCL entered 2026 with about two-thirds of capacity booked at record prices across North America and Europe.
NCLH posted record bookings and 106% occupancy, but growth leans on volume with leverage still higher.
Carnival Corporation & plc (CCL - Free Report) and Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) stand as two of the most closely watched names in the global cruise industry, each offering investors a different path to recovery and long-term growth as travel demand normalizes.
While both operators have benefited from resilient booking trends and improving onboard spending, their financial profiles, brand portfolios and balance-sheet strategies diverge in meaningful ways. With investors increasingly focused on earnings visibility, leverage reduction and yield-driven growth, the question is no longer whether cruising is back, but which of these two stocks is better positioned to deliver superior returns in the next leg of the cycle.
The Case for CCL
Carnival’s investment appeal rests on a clear step-change in operating performance and earnings power. Management highlighted that 2025 marked record highs across revenues, yields, operating income and EBITDA, with net income exceeding $3 billion, a roughly 60% jump year over year. Importantly, this growth was not driven by aggressive capacity additions, but by stronger pricing, higher onboard spending and disciplined commercial execution across brands. The result was a return on invested capital above 13%, the highest level in nearly two decades, signaling that Carnival’s core business is now generating materially better returns than in the pre-pandemic era.
Another pillar of the CCL bull case is the resilience of demand and visibility into growth. Carnival entered 2026 with roughly two-thirds of capacity already booked at historically high prices in both North America and Europe. Booking volumes for 2026 and 2027 recently hit record levels, while customer deposits reached an all-time high, underscoring strong forward demand.
Management emphasized that this momentum has held up despite weak consumer sentiment readings, suggesting cruising demand is proving more durable than traditional macro indicators would imply. This demand strength supports continued same-ship yield growth, even as industry capacity expands in key markets like the Caribbean.
Carnival’s improving cost structure further strengthens its relative positioning. The company managed to hold unit cost growth below expectations in 2025, despite inflation, dry-dock expenses and new destination-related costs. Looking ahead, management expects normalized cruise costs excluding fuel to rise at a manageable pace, supported by scale-driven efficiencies and targeted cost-mitigation initiatives. With no new ship deliveries in 2026, incremental cash flow is expected to flow directly to the bottom line, helping drive another year of double-digit earnings growth and EBITDA of more than $7.6 billion.
Finally, Carnival’s balance-sheet turnaround meaningfully enhances the equity story. The company has reduced debt by more than $10 billion from peak levels, achieved an investment-grade leverage ratio of about 3.4x and expects to move below 3x net debt to EBITDA by the end of 2026. This progress has enabled the reinstatement of dividends and opened the door to opportunistic share repurchases, signaling confidence in sustainable cash generation. Combined with strategic investments in private destinations like Celebration Key and a diversified global brand portfolio, Carnival appears positioned to compound earnings and shareholder returns as the cruise cycle continues to normalize.
The Case for NCLH
Norwegian Cruise is entering 2026 with clear operational momentum. The company delivered record third-quarter revenues, EBITDA and bookings, underscoring the resilience of cruise demand even as discretionary spending remains under scrutiny. Occupancy exceeded 106%, while bookings rose more than 20% year over year, providing strong visibility into future sailings. Importantly, this demand strength was broad-based across Norwegian Cruise’s contemporary, premium and luxury brands, suggesting the recovery is no longer reliant on a single customer segment. Management’s confidence in sustaining high load factors into 2026 strengthens the case for continued earnings growth.
NCLH’s deliberate pivot toward shorter Caribbean itineraries and increased family participation is improving fleet utilization and profitability. While adding families can modestly dilute headline pricing, higher occupancy and minimal incremental costs for third and fourth passengers are expanding margins. The company expects load factors to exceed pre-pandemic levels in 2026, supported by an increased mix of closer-to-home sailings. This strategy prioritizes margin and cash flow over pure yield optics, positioning Norwegian Cruise to outperform peers that remain more exposed to longer, costlier itineraries.
Beyond near-term demand, Norwegian Cruise is making meaningful progress on financial flexibility. Management reaffirmed deleveraging as a top priority, targeting leverage in the mid-4x range in 2026 while continuing margin expansion. Recent refinancing actions extended maturities and eliminated secured debt, reducing financial risk. At the same time, the company’s luxury brands, Oceania and Regent, are benefiting from strong high-end travel demand, with new ships and fleet upgrades poised to support premium pricing and incremental returns. This blend of balance sheet discipline and luxury exposure creates a compelling longer-term earnings profile.
The key risk in the NCLH story lies in its reliance on volume-driven growth. The shift toward family-heavy, short-duration sailings comes with some yield dilution and sustaining pricing power will require flawless execution as capacity grows. While management argues that margin expansion offsets lower blended pricing, any softening in consumer demand or promotional pressure in the Caribbean could quickly test this strategy. Additionally, leverage remains elevated compared with some peers, leaving less room for error if macro conditions deteriorate or fuel and operating costs reaccelerate.
How Does the Zacks Consensus Estimate Compare for CCL & NCLH?
The Zacks Consensus Estimate for Carnival’s fiscal 2026 sales and earnings per share (EPS) indicates year-over-year increases of 4.3% and 12%, respectively. Over the past 30 days, earnings estimates for fiscal 2026 have been revised upward, as shown in the chart.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Norwegian Cruise’s 2026 sales and EPS implies year-over-year growth of 9.8% and 23.6%, respectively. Over the past 30 days, earnings estimates for 2026 have witnessed downward revisions.
Image Source: Zacks Investment Research
Price Performance & Valuation
Carnival’s shares have gained 3.2% in the past year. Meanwhile, Norwegian Cruise stock has declined 26.9% in the same time frame, compared with its industry’s decrease of 3.8%.
Price Performance
Image Source: Zacks Investment Research
CCL is trading at a forward 12-month price-to-earnings ratio of 11.15X, below its median of 12.06X over the last year. NCLH’s forward earnings multiple sits at 7.87X, above its median of 7.39X over the same time frame.
P/E (F12M)
Image Source: Zacks Investment Research
Wrapping Up
Taken together, the comparison tilts in favor of Carnival at this stage of the cycle because its recovery is being driven by improving quality of earnings rather than just volume. Carnival is benefiting from stronger pricing, higher onboard spending and better cost control, which are translating into rising returns and growing financial flexibility, while also giving management the confidence to return cash to its shareholders. Its demand visibility is strong, and with capacity growth temporarily pausing, incremental cash flow is likely to flow directly to earnings, supporting a steadier and more predictable growth profile.
By contrast, NCLH’s momentum is real but more execution-sensitive, as it relies heavily on high occupancy and itinerary mix shifts that can pressure pricing and leave less margin for error, especially with leverage still elevated. For investors, this makes CCL better positioned for fresh capital today, while NCLH remains a stock to hold rather than add, as its upside appears more dependent on flawless execution and a supportive macro backdrop.
Image: Bigstock
Carnival vs. Norwegian Cruise: Which Stock Is Poised to Outperform?
Key Takeaways
Carnival Corporation & plc (CCL - Free Report) and Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) stand as two of the most closely watched names in the global cruise industry, each offering investors a different path to recovery and long-term growth as travel demand normalizes.
While both operators have benefited from resilient booking trends and improving onboard spending, their financial profiles, brand portfolios and balance-sheet strategies diverge in meaningful ways. With investors increasingly focused on earnings visibility, leverage reduction and yield-driven growth, the question is no longer whether cruising is back, but which of these two stocks is better positioned to deliver superior returns in the next leg of the cycle.
The Case for CCL
Carnival’s investment appeal rests on a clear step-change in operating performance and earnings power. Management highlighted that 2025 marked record highs across revenues, yields, operating income and EBITDA, with net income exceeding $3 billion, a roughly 60% jump year over year. Importantly, this growth was not driven by aggressive capacity additions, but by stronger pricing, higher onboard spending and disciplined commercial execution across brands. The result was a return on invested capital above 13%, the highest level in nearly two decades, signaling that Carnival’s core business is now generating materially better returns than in the pre-pandemic era.
Another pillar of the CCL bull case is the resilience of demand and visibility into growth. Carnival entered 2026 with roughly two-thirds of capacity already booked at historically high prices in both North America and Europe. Booking volumes for 2026 and 2027 recently hit record levels, while customer deposits reached an all-time high, underscoring strong forward demand.
Management emphasized that this momentum has held up despite weak consumer sentiment readings, suggesting cruising demand is proving more durable than traditional macro indicators would imply. This demand strength supports continued same-ship yield growth, even as industry capacity expands in key markets like the Caribbean.
Carnival’s improving cost structure further strengthens its relative positioning. The company managed to hold unit cost growth below expectations in 2025, despite inflation, dry-dock expenses and new destination-related costs. Looking ahead, management expects normalized cruise costs excluding fuel to rise at a manageable pace, supported by scale-driven efficiencies and targeted cost-mitigation initiatives. With no new ship deliveries in 2026, incremental cash flow is expected to flow directly to the bottom line, helping drive another year of double-digit earnings growth and EBITDA of more than $7.6 billion.
Finally, Carnival’s balance-sheet turnaround meaningfully enhances the equity story. The company has reduced debt by more than $10 billion from peak levels, achieved an investment-grade leverage ratio of about 3.4x and expects to move below 3x net debt to EBITDA by the end of 2026. This progress has enabled the reinstatement of dividends and opened the door to opportunistic share repurchases, signaling confidence in sustainable cash generation. Combined with strategic investments in private destinations like Celebration Key and a diversified global brand portfolio, Carnival appears positioned to compound earnings and shareholder returns as the cruise cycle continues to normalize.
The Case for NCLH
Norwegian Cruise is entering 2026 with clear operational momentum. The company delivered record third-quarter revenues, EBITDA and bookings, underscoring the resilience of cruise demand even as discretionary spending remains under scrutiny. Occupancy exceeded 106%, while bookings rose more than 20% year over year, providing strong visibility into future sailings. Importantly, this demand strength was broad-based across Norwegian Cruise’s contemporary, premium and luxury brands, suggesting the recovery is no longer reliant on a single customer segment. Management’s confidence in sustaining high load factors into 2026 strengthens the case for continued earnings growth.
NCLH’s deliberate pivot toward shorter Caribbean itineraries and increased family participation is improving fleet utilization and profitability. While adding families can modestly dilute headline pricing, higher occupancy and minimal incremental costs for third and fourth passengers are expanding margins. The company expects load factors to exceed pre-pandemic levels in 2026, supported by an increased mix of closer-to-home sailings. This strategy prioritizes margin and cash flow over pure yield optics, positioning Norwegian Cruise to outperform peers that remain more exposed to longer, costlier itineraries.
Beyond near-term demand, Norwegian Cruise is making meaningful progress on financial flexibility. Management reaffirmed deleveraging as a top priority, targeting leverage in the mid-4x range in 2026 while continuing margin expansion. Recent refinancing actions extended maturities and eliminated secured debt, reducing financial risk. At the same time, the company’s luxury brands, Oceania and Regent, are benefiting from strong high-end travel demand, with new ships and fleet upgrades poised to support premium pricing and incremental returns. This blend of balance sheet discipline and luxury exposure creates a compelling longer-term earnings profile.
The key risk in the NCLH story lies in its reliance on volume-driven growth. The shift toward family-heavy, short-duration sailings comes with some yield dilution and sustaining pricing power will require flawless execution as capacity grows. While management argues that margin expansion offsets lower blended pricing, any softening in consumer demand or promotional pressure in the Caribbean could quickly test this strategy. Additionally, leverage remains elevated compared with some peers, leaving less room for error if macro conditions deteriorate or fuel and operating costs reaccelerate.
How Does the Zacks Consensus Estimate Compare for CCL & NCLH?
The Zacks Consensus Estimate for Carnival’s fiscal 2026 sales and earnings per share (EPS) indicates year-over-year increases of 4.3% and 12%, respectively. Over the past 30 days, earnings estimates for fiscal 2026 have been revised upward, as shown in the chart.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Norwegian Cruise’s 2026 sales and EPS implies year-over-year growth of 9.8% and 23.6%, respectively. Over the past 30 days, earnings estimates for 2026 have witnessed downward revisions.
Image Source: Zacks Investment Research
Price Performance & Valuation
Carnival’s shares have gained 3.2% in the past year. Meanwhile, Norwegian Cruise stock has declined 26.9% in the same time frame, compared with its industry’s decrease of 3.8%.
Price Performance
Image Source: Zacks Investment Research
CCL is trading at a forward 12-month price-to-earnings ratio of 11.15X, below its median of 12.06X over the last year. NCLH’s forward earnings multiple sits at 7.87X, above its median of 7.39X over the same time frame.
P/E (F12M)
Image Source: Zacks Investment Research
Wrapping Up
Taken together, the comparison tilts in favor of Carnival at this stage of the cycle because its recovery is being driven by improving quality of earnings rather than just volume. Carnival is benefiting from stronger pricing, higher onboard spending and better cost control, which are translating into rising returns and growing financial flexibility, while also giving management the confidence to return cash to its shareholders. Its demand visibility is strong, and with capacity growth temporarily pausing, incremental cash flow is likely to flow directly to earnings, supporting a steadier and more predictable growth profile.
By contrast, NCLH’s momentum is real but more execution-sensitive, as it relies heavily on high occupancy and itinerary mix shifts that can pressure pricing and leave less margin for error, especially with leverage still elevated. For investors, this makes CCL better positioned for fresh capital today, while NCLH remains a stock to hold rather than add, as its upside appears more dependent on flawless execution and a supportive macro backdrop.
CCL carries a Zacks Rank #2 (Buy), whereas NCLH has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.