Will Carnival Stocks Hit $27? One Wall Street analyst thinks so.

Carnival (NYSE:CCL) will release its fiscal third-quarter earnings results on September 30. Despite strong demand for cruise vacations, the company’s stock has been fluctuating this year, but Financial Stifel analyst Steven Wieczyński believes that the publication of better-than-expected results may result in an increase in share prices.

The analyst reiterated his buy rating on the stock and raised his price target from $25 to $27, representing a 44% increase from the current share price.

Why should you buy Carnival stock?

Carnival is having a strong quarter with record revenues, operating income, customer deposits and reservations. Management said there is “unprecedented demand” for 2025. This could lead to another strong third-quarter earnings report.

As debt repayments and cost reductions continue, greater earnings growth should drive the share price higher. The current consensus estimates that Carnival will report adjusted earnings per share of $1.20 this year, rising again to $1.59 in fiscal 2025.

However, Wieczyński believes that Carnival could also beat next year’s earnings estimates. Management continues to find exit costs, which helped it beat guidance last quarter.

Most importantly, demand for cruises continues to appear extremely strong. The booking curve in North America is at an all-time high, which should continue to support prices and boost profits.

The company’s stock has risen in anticipation of its third-quarter earnings report, so investors are expecting good news, but its valuation remains fair. As investors begin to look ahead to 2025 guidance, Carnival stock could reach new highs and move toward the analyst’s price target.

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John Ballard has no position in any of the companies mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.