Bank of America Lowers Carnival Stock Target Due to Rising Fuel Costs
Carnival (CCL) is facing a new challenge as rising fuel costs threaten its financial performance, despite strong demand for cruises. Bank of America analyst Andrew Didora reduced the price target on Carnival stock from $42 to $38 ahead of its third-quarter earnings report due to surging oil prices linked to Middle East tensions. Carnival remains uniquely vulnerable because it is the only major cruise operator without fuel hedging, making it more exposed as Brent crude has risen 30% year-to-date. The impact on Carnival’s finances will likely become clearer in Q4, with Bank of America lowering its fourth-quarter EPS forecast to $0.20 from $0.27 and revising down full-year projections for 2027 and 2028 as well. Despite these headwinds, the company has shown strong operational results this year, including record sales in Q2 and robust customer spending on board ships. Carnival’s own guidance highlights its sensitivity to fuel costs: a 10% change per metric ton could affect adjusted net income by around $160 million for the rest of 2026. While Carnival has improved fuel efficiency, it remains insufficient to offset rising prices.
Tickers: $CCL
Topics: Bank of America Carnival cruise industry oil prices stock price target