Carnival stock hits $27? One Wall Street analyst thinks so.

Carnival (CCL 3.69%) will report earnings results for its fiscal third quarter on September 30. Despite strong demand for cruise holidays, shares have been range-bound this year, but Stifel Financial analyst Steven Wieczynski believes a better-than-expected earnings release could send shares higher.

The analyst maintained a buy rating on the stock and raised his price target from $25 to $27, representing a 44% upside from the stock’s current price.

Why Buy Carnival Stock?

Carnival is coming off a strong quarter with record revenue, operating income, customer deposits and bookings. Management said there is “unprecedented demand” for 2025. That could trigger another strong third-quarter earnings report.

As the company continues to pay down debt and cut costs, higher earnings growth should push the stock price higher. The current consensus estimate has Carnival reporting adjusted earnings per share of $1.20 this year, before rising again to $1.59 in fiscal 2025.

However, Wieczynski believes Carnival could also beat next year’s earnings estimate. Management continues to find costs to divest businesses, which helped it beat last quarter’s guidance.

Most importantly, demand for cruises continues to look incredibly strong. The booking curve for North America is at record levels and this should continue to benefit pricing and boost profits.

The stock rallied ahead of its third-quarter earnings report, so investors are expecting good news, but the stock still trades at a fair valuation. As investors begin to look at 2025 guidance, Carnival shares could hit new highs and head toward the analyst’s price target.