Carlival Corp (CCL)) A strong free cash flow was reported this morning to finish Q3 on August 31. People like to take more and more cruises, and this can be seen in management instructions. Based on high revenue estimates for analysts, CCL shares can be more than 23 %.
CCL shares are traded today 29.14Decrease from the last peak of $ 31.45 on September 18 and $ 32.49 on August 28.
But this may not continue after analysts seized their revenue estimates. I appreciate that based on a strong free cash flow, it can be at least CCL $ 35.84 For one stock.
CCL – last 3 months – Barchart – September 29, 2025
This is higher than my previous appreciation $ 34.63Based on the results of the Q2. This can be observed in the Parchart article on June 24, “Corb Corp’s cash flow – CCL shares appear to be less than their value.“
Let’s see why it can be more worth.
Carnival stated that its revenues increased by 3.25 % on an annual basis (Y/Y) to 8.153 billion dollars, and the cash flow from operations increased by 14.77 % year on year to $ 1.383 billion. In addition, its revenues increased for 9 months +6.34 % on an annual basis.
However, capital expenses (“” CAPEX “) were 12.1 % higher in Q2. As a result, the FCF (IE, FCF/Revenue) margin was less than the OCF cash flow margin (OCF). This can be seen below using data from Carnival:
It indicates that the OCF margin was 17 % of sales, compared to the FCF margin by only 9 %, although the latter was 7.3 % higher than the FCF margin last year. However, during the first nine months of this fiscal year, the FCF margin was approximately 13 % (12.8 %).
Note that these numbers were less than the last quarter, as shown in my previous article. The difference can be due to the high reservations specified for the summer vacation period during the second quarter.
However, the administration has now raised its revenues and return for the third time. This can lead to high cash flow and operation of OCF margins. Depending on how much the company spends on Capex in the financial Q4 (ending on November 30), FCF margins can be slightly higher.
CAPEX spending. For example, the administration indicates that there are $ 1.7 billion in the new and non -new remains (i.e. over several years). This decreased $ 600 million of Q2 guidelines of $ 2.3 billion in the remaining Capex. This equals 648 million dollars in the CAPEX spending that was booked during the Q3 fiscal year, which was already less than Capex $ 850 million that was booked during the second quarter.
As a result, we can expect CAPEX to range between $ 650 million and $ 850 million in the advanced quarter. This will affect our FCF estimates.
Suppose its financial year, the next 12 -month revenue expectations (NTM) and the height of FCF margins. For example, analysts now expect the fiscal year revenues to be 2025 26.57 billion dollars. This rises 26.11 billion dollars, as shown in my last article.
We can expect analysts to be able to raise the fiscal year’s revenue expectations 25 to 27 billion dollars. Next year, their expectations may rise to 28 billion dollars, from 27.65 billion dollars today. This brings at least NTM forecasts $ 27.75 One billion (26 % fiscal year evaluation by 75 %).
Moreover, let’s assume that the NTM FCF margin will be 14 %, up from 13 % in its results for 9 months. This may be due to flat or low spending, as mentioned above, with high revenues. As a result, we can predict FCF:
27.75 billion dollars in revenues x 14 % of the FCF margin = 3.885 billion dollars FCF
This is higher than 12 % of the Retal FCF estimate using FCF for 9 months from $ 2.595 billion:
This may lead to a top price at least 12 % higher, and even more if multiple increases.
One way to evaluate this is to use the FCF return scale. For example, the maximum Carnival market today is 39.368 billion dollars. Using a 3.46 billion straight FCF estimate in FCF, FCF’s return is:
$ 3.46B FCF / 39.368 B Mkt Cap = 0.0878 = 8.8 %
This works to double FCF from 11.4X (i.e. 1/0.0878 = 11.39). Suppose the market will raise FCF complications to 12.5X (i.e. FCF revenue by 8.5 %) with NTM FCF increase:
$ 3.885 b ntm x 12.5 = 48.56 billion dollars MKT CAP
This is 23 % higher than today’s market rating of $ 39.368 billion.
48.56B NTM MKT Cap Est. / 39.358B Today = 1.2335 = +23.35 %
In other words, the value of CCL shares is 23 % of the price of the day of $ 29.14:
$ 29.14 x 1.23 = $ 35.84 The target price
For example, Yahoo! The financing shows that the average of 28 analysts $ 34.73 For a single stock, the BARCART scan shows average price $ 34.48. In the past three months, these analysts raised their goals from 28.55 dollars and $ 28.17, respectively, as shown in my last article in Barchart.
Likewise, Anachart, which tracks modern analysts writing, shows that the average of 18 analysts $ 36.35 For one stock, up from $ 30.03 three months ago.
The important point is that analysts raise their price goals because they see the free cash flow of the company and FCF margins are continuing to improve.
One way to play this is a short sale outside of money (OTM), to obtain income and set a lower purchase price.
For example, investors can make more than 2.0 % of the revenue that gives up the 7 % option outside the money that ends on October 31. Here’s how to do it.
The expiration period of October 31 shows that the $ 27.00 strike option is 57 cents installment:
$ 0.57 / $ 27.00 = 0.0211 = 2.11 % Put the return for one month
CCL sets the expiration of October 31 – Barsht – as of September 29, 2025
An investor who gets $ 2700 in cash or purchase with their brokerage company can enter “for sale” 1 which was placed at $ 27.00 to finish on October 31.
The account will immediately get $ 57.00 when the trade is filled at the center point. This works on an immediate return to invest or return by 2.1 % (i.e. $ 57/2700 dollars).
If CCL decreases by 7.4 % to $ 27.00, the guarantee will be used to buy 100 shares at $ 27.00. The negative risks is that if CCL falls more, the investor may end with an unrealistic loss.
However, at least, with the already received income, the tie point is less:
$ 27.00 – 0.57 dollars = 26.43 dollars
26.43 dollars / 29.17 dollars -1 = 9.39 % less than today’s price
This is a great negative protection. Moreover, if the investor can repeat this short play for 3 months, the expected return (ER) is more than 6 %:
0.0211 x 3 = 0.633 = +6.33 % For 3 months
This is the same as a CCL contract and its vision rises to $ 31.02 per share. In addition, the investor has an increasingly tie point. This is why short plays are often a great way to set a share of an arrow.
On the date of publication, Mark R. Hack, CFA parking (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are only for media purposes. This article was originally published on Barchart.com
