Carnival Corp. has quietly become one of the most striking comeback stories in the travel sector. After being brought to a near standstill during the pandemic, the world’s largest cruise operator has rebuilt its business at a remarkable pace.
Shares have climbed roughly 180% over the past 36 months, and with the stock now trading around $29, investors are asking a critical question: Can Carnival realistically reach $40 in 2026? According to analysts at Unirock Gestion, the answer depends on a mix of valuation, demand durability, balance-sheet repair, and macroeconomic conditions.
A Look Back at the Recovery
Carnival Corp. operates more than 90 ships across multiple cruise brands, serving travelers worldwide. The company’s operations were devastated during COVID-19 as global travel restrictions forced sailings to halt. In fiscal 2021, revenue collapsed by 66%, and Carnival posted a staggering $9.5 billion net loss.
The rebound since then has been dramatic. Over the last three years, Carnival’s share price has risen at an annualized pace of roughly 41%. To move from $29 to $40 would require an additional 38% gain in about 11 months, ambitious, but not unprecedented given recent performance.
Valuation Still Favors the Bulls
Despite the sharp rally, Carnival’s valuation remains relatively restrained. The stock currently trades at a price-to-earnings ratio near 14.7, which is a notable discount to the broader market. The S&P 500 trades closer to 25.7 times earnings.
If Carnival were to close even part of that valuation gap, assuming earnings remain stable, it could justify meaningful upside from current levels. Analysts point out that this discount reflects lingering caution rather than weak operating performance, particularly given the company’s recent financial results.
Record Financial Performance Signals Momentum
Carnival’s most recent fiscal year, ending November 30, 2025, marked a turning point. The company reported:
- Record revenue of $26.6 billion
- Record adjusted net income of $3.1 billion
One standout contributor has been onboard spending, which has grown faster than ticket sales. This revenue stream carries higher margins and improves overall profitability. As ships sail closer to full capacity, incremental onboard spending flows disproportionately to the bottom line.
Demand Remains Firm Heading Into 2026
Demand indicators continue to support the recovery narrative. Carnival finished the fourth quarter with $7.2 billion in customer deposits, another all-time high. This provides strong visibility into near-term bookings and cash flows.
Cruises also remain competitively priced. Industry estimates suggest cruise vacations can be 25% to 50% cheaper than comparable land-based resorts, making them attractive to cost-conscious travelers. According to AAA forecasts, 2026 is expected to set another record for American cruise travelers, reinforcing confidence in sustained demand. Analysts view this visibility as a key stabilizing factor for the stock.
Expanding the Experience With Private Destinations
Beyond volume growth, Carnival is investing in differentiated guest experiences. The company recently opened Celebration Key in Grand Bahama and announced plans for Ensenada Bay Village in Baja California, Mexico.
These private destinations allow Carnival to:
- Control the guest experience more tightly
- Capture higher-margin excursion and onboard spending
- Reduce reliance on third-party ports
Over time, these assets could strengthen brand loyalty and enhance profitability, particularly as repeat customers return.
Balance Sheet Is Improving, But Still a Watch Point
Carnival’s improving profitability has enabled meaningful progress on debt reduction. Total debt currently stands at $26.6 billion, representing about 69% of the company’s market capitalization. While still elevated, this figure is $10 billion lower than its peak, a significant improvement.
Management has noted that declining leverage has already led to better credit ratings, which could translate into lower borrowing costs. From a long-term perspective, continued debt reduction remains critical to sustaining equity upside.
Macro Conditions Could Be the Swing Factor
As a discretionary travel business, Carnival is sensitive to broader economic trends. Consumer confidence, employment conditions, fuel prices, and GDP growth all influence booking behavior. A sharp economic slowdown could pressure demand.
That said, the macro backdrop for 2026 currently appears supportive. The Federal Reserve has cut interest rates multiple times since late 2025 and reintroduced accommodative policies, actions that historically encourage consumer spending and travel activity.
Final Takeaway
Carnival’s transformation from pandemic distress to record profitability has been swift and measurable. Valuation remains below market averages, demand indicators are strong, and balance-sheet repair is underway. According to brokers, while risks tied to the economy and leverage remain, a move toward $40 in 2026 is achievable if current trends hold.
For investors, Carnival no longer represents a pure recovery gamble; it is increasingly a fundamentals-driven reopening story with momentum still behind it.
