Carnival selloff overdone, a buying opportunity into earnings: Stifel

Investing.com -- Stifel has told investors to buy Carnival shares ahead of the cruise operator's third-quarter results on Sept. 29, arguing a recent selloff has gone too far.

Analyst Steven Wieczynski said fears over Caribbean pricing, higher oil prices and demand have already been more than priced in, calling the pullback another overreaction that presents a buying opportunity.

"We are buyers into their print," he wrote, noting Carnival shares have fallen about 27% over the past six weeks, while the S&P 500 was flat and global fuel prices rose roughly 24%.

The analyst acknowledged that competition in the Caribbean has intensified and could pressure close-in pricing in the near term, but estimated the hit at just 50 to 75 basis points of yield.

"Not sure that we can sit here and say that 50bps-75bps of yield impact should equate to a ~25% drop in the equity value," he wrote.

Wieczynski noted Carnival was already 93% booked for fiscal 2026 back in June, and said help was on the way as Caribbean capacity normalizes and rival Norwegian Cruise Line takes a more rational approach to filling ships.

He also expects positive qualitative commentary on 2027 bookings, which he said could be a near-term catalyst given negative sentiment.

Stifel said Carnival's 2029 financial targets remain "massively underappreciated," and added that any weakness in Royal Caribbean or Viking on Carnival's print would be a buying opportunity, as both are better positioned.

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