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Carnival Completes $19B Refinancing, Targets Further Leverage Decline
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Key Takeaways
Carnival closed FY25 with a stronger balance sheet after cutting debt by over $10B.
CCL completed a $19B refinancing, lowering interest costs and reaching 3.4x net debt-to-EBITDA.
Carnival projects leverage below 3x in 2026 and reinstated a $0.15 quarterly dividend.
Carnival Corporation & plc (CCL - Free Report) closed fiscal 2025 with a materially stronger balance sheet, underscoring the progress of its multi-year deleveraging effort. Management reported that the company has reduced total debt by more than $10 billion from its peak less than three years ago, reflecting sustained focus on capital structure repair alongside improved operating performance.
A key milestone during the year was the completion of a $19 billion refinancing plan in less than 12 months. This initiative simplified Carnival’s capital structure, lowered interest expense and optimized its maturity profile. As a result of both refinancing activity and earnings growth, the company ended fiscal 2025 with a net debt-to-adjusted EBITDA ratio of 3.4x, achieving investment-grade status with Fitch and standing one notch below investment grade with a positive outlook from S&P.
The financial impact of these actions is expected to become more visible in fiscal 2026. Management indicated that net interest expense in fiscal 2026 is projected to improve by more than $700 million compared with fiscal 2023. The strengthened credit profile also enabled Carnival to formally reinstate its quarterly dividend at $0.15 per share, signaling confidence in cash flow durability and balance sheet stability.
Looking ahead, Carnival expects leverage to fall to below 3x net debt to EBITDA by fiscal 2026-end, after accounting for four dividend distributions during the year. Management has indicated that a leverage level in the high-2x range would align with its longer-term objective of supporting a stronger credit rating profile. In addition, the company recently called the last of its convertible debt, using cash to retire approximately 18 million shares, further streamlining the capital structure.
Collectively, Carnival’s debt reduction, refinancing execution and improved leverage metrics reflect a structural shift in its financial position. With refinancing largely complete and leverage trending toward stated targets, the company’s deleveraging phase appears substantially advanced relative to prior years, supported by stronger earnings and enhanced financial flexibility.
CCL’s Price Performance, Valuation & Estimates
Shares of Carnival have gained 26.6% in the past three months compared with the industry’s growth of 11.7%. In the same time frame, other industry players like Royal Caribbean Cruises Ltd. (RCL - Free Report) and Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) have gained 30.5% and 23.7%, respectively, while OneSpaWorld Holdings Limited (OSW - Free Report) has risen 6.7%.
CCL Stock’s Three-Month Price Performance
Image Source: Zacks Investment Research
CCL stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 12.76, well below the industry average of 17.38. Conversely, industry players, such as Royal Caribbean, Norwegian Cruise and OneSpaWorld have P/E ratios of 18.14, 8.64 and 19.49, respectively.
CCL’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Carnival’s fiscal 2026 earnings per share has been revised upward, increasing from $2.40 to $2.54 over the past 60 days. This upward trend indicates strong analyst confidence in the stock’s near-term prospects.
EPS Trend of CCL Stock
Image Source: Zacks Investment Research
The company is likely to report solid earnings, with projections indicating a 12.9% rise in fiscal 2026. Conversely, industry players like Royal Caribbean, Norwegian Cruise and OneSpaWorld are likely to witness a gain of 15.7%, 15.9% and 20%, respectively, year over year in 2026 earnings.
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Carnival Completes $19B Refinancing, Targets Further Leverage Decline
Key Takeaways
Carnival Corporation & plc (CCL - Free Report) closed fiscal 2025 with a materially stronger balance sheet, underscoring the progress of its multi-year deleveraging effort. Management reported that the company has reduced total debt by more than $10 billion from its peak less than three years ago, reflecting sustained focus on capital structure repair alongside improved operating performance.
A key milestone during the year was the completion of a $19 billion refinancing plan in less than 12 months. This initiative simplified Carnival’s capital structure, lowered interest expense and optimized its maturity profile. As a result of both refinancing activity and earnings growth, the company ended fiscal 2025 with a net debt-to-adjusted EBITDA ratio of 3.4x, achieving investment-grade status with Fitch and standing one notch below investment grade with a positive outlook from S&P.
The financial impact of these actions is expected to become more visible in fiscal 2026. Management indicated that net interest expense in fiscal 2026 is projected to improve by more than $700 million compared with fiscal 2023. The strengthened credit profile also enabled Carnival to formally reinstate its quarterly dividend at $0.15 per share, signaling confidence in cash flow durability and balance sheet stability.
Looking ahead, Carnival expects leverage to fall to below 3x net debt to EBITDA by fiscal 2026-end, after accounting for four dividend distributions during the year. Management has indicated that a leverage level in the high-2x range would align with its longer-term objective of supporting a stronger credit rating profile. In addition, the company recently called the last of its convertible debt, using cash to retire approximately 18 million shares, further streamlining the capital structure.
Collectively, Carnival’s debt reduction, refinancing execution and improved leverage metrics reflect a structural shift in its financial position. With refinancing largely complete and leverage trending toward stated targets, the company’s deleveraging phase appears substantially advanced relative to prior years, supported by stronger earnings and enhanced financial flexibility.
CCL’s Price Performance, Valuation & Estimates
Shares of Carnival have gained 26.6% in the past three months compared with the industry’s growth of 11.7%. In the same time frame, other industry players like Royal Caribbean Cruises Ltd. (RCL - Free Report) and Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) have gained 30.5% and 23.7%, respectively, while OneSpaWorld Holdings Limited (OSW - Free Report) has risen 6.7%.
CCL Stock’s Three-Month Price Performance
Image Source: Zacks Investment Research
CCL stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 12.76, well below the industry average of 17.38. Conversely, industry players, such as Royal Caribbean, Norwegian Cruise and OneSpaWorld have P/E ratios of 18.14, 8.64 and 19.49, respectively.
CCL’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Carnival’s fiscal 2026 earnings per share has been revised upward, increasing from $2.40 to $2.54 over the past 60 days. This upward trend indicates strong analyst confidence in the stock’s near-term prospects.
EPS Trend of CCL Stock
Image Source: Zacks Investment Research
The company is likely to report solid earnings, with projections indicating a 12.9% rise in fiscal 2026. Conversely, industry players like Royal Caribbean, Norwegian Cruise and OneSpaWorld are likely to witness a gain of 15.7%, 15.9% and 20%, respectively, year over year in 2026 earnings.
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.