Carnival Corporation heads into Tuesday's Q2 print with the stock running hot, short sellers still retreating, and analysts lining up behind a recovery story — leaving the debate squarely on execution.
The stock has gained 24% over the past month, closing at $30.87 on Thursday, up another 10% on the week. That rally is happening as short sellers continue to exit: positions have fallen 27% over the past month to 2.9% of the float, continuing the unwind documented in ORTEX's June 10 note (which flagged a 21.6% weekly collapse to 3.0% of float). The retreat is not being forced. Borrow availability remains extraordinarily loose at 3,812% — roughly 38 shares available for every one currently shorted — and the cost to borrow is just 0.51%. Shorts are choosing to step away, not being squeezed out. The broader cruise sector is moving in the same direction: NCLH and RCL added 7% and 9% respectively on the week, suggesting sector tailwinds rather than a CCL-specific catalyst.
The options market has picked up a touch more defensive coloring as the print approaches. The put/call ratio has edged to 1.16, running modestly above its 20-day average of 1.10 — about 1.2 standard deviations above the mean. That is nowhere near alarming; the 52-week high sits at 1.48. Options traders are paying a little more for downside protection, but the overall read is hedging rather than outright fear.
The analyst community has been uniformly constructive in the run-up. Citigroup raised its target to $37 and Stifel lifted to $36 in the past week, both maintaining Buy ratings. Two new Buy initiations arrived from Loop Capital and Freedom Broker in early June. The consensus is 17 Buy ratings with a mean target implying roughly 20% additional upside from current levels. Bulls are focused on yield guidance upgrades, strong onboard spending, and the stock's free cash flow generation. The bear case centers on unhedged fuel exposure, geopolitical itinerary risk in the Mediterranean, and whether the recent macro-driven demand softness in Europe has passed. Truist, the notable holdout, trimmed its Hold target to $29 last month — now below the current price — flagging macro uncertainty as the key constraint on its view.
Past reactions offer little directional comfort: the April print delivered a 6% one-day gain that gave back nearly all of its move within five days, while the March report saw an immediate 5% drop before a partial recovery. The Tuesday print will test whether the demand and yield momentum that bulls are banking on is strong enough to justify a stock that has already re-rated sharply higher before the numbers arrive.
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