Carnival Corporation heads into the final stretch before its June 22 earnings with options positioning at its most defensive tilt in months, even as short sellers quietly reduce their exposure.
The clearest signal this week is in options. The put/call ratio has jumped to 1.21, more than two standard deviations above its 20-day average of 1.02 — a z-score of 2.16 that puts it among the most defensive readings of the past year, second only to the 52-week high of 1.48. That has been building since mid-May; for the prior three weeks the PCR was consistently below 1.0, meaning the demand for downside protection is a recent and abrupt shift rather than a slow drift. The timing is notable. Carnival has shed 18% over the past month, closing at $23.89 on May 19 and dropping another 4.1% on the day. Options traders are responding to that weakness, not anticipating it.
Short interest tells a more relaxed story, and the contrast matters. Shorts trimmed their exposure this week — short interest fell 4.4% on May 19 alone and is down 4.3% on the week, bringing the free float percentage to 4.0%. That figure has risen 12% over the past month, which sounds alarming, but the lending market is not flashing stress. Borrowing costs have actually eased to 0.36% annually, down 18% week-on-week and at their lowest reading in the past 30 days. Availability is extraordinarily loose — currently running at over 3,300% relative to shares already borrowed, well above even the 52-week floor of 366% recorded on May 8 when conditions briefly tightened. There is no squeeze dynamic here. The month-long build in short interest looks like a considered repositioning, not a panic rush to borrow shares.
The Street remains constructive but is recalibrating its numbers. TD Cowen, reporting as recently as May 15, nudged its target to $34 from $33 while maintaining its Buy rating — a modest, directional vote of confidence from one analyst in a week when the stock fell hard. The mean price target sits at $34.06, implying roughly 43% upside from current levels. Bulls point to a return on capital that climbed from 8.4% to 10.4% over the last twelve months and record net sales revenue of $26.2 billion, alongside nearly 96% growth in economic profit. Bears counter with a net debt-to-EBITDA ratio still running near 3.6x, revised-down EPS estimates for 2026–2028, and persistent concerns about fuel cost volatility. Valuation multiples reflect the sell-off: the P/E has compressed by 2.3 turns over the past month to 10.1x, and EV/EBITDA has slipped to 7.98x. The EPS surprise factor ranks at the 64th percentile, suggesting the company has a reasonable track record of beating expectations — a data point the bulls will lean on into June.
Institutional flows offer a notable subplot. Vanguard added 4.5 million shares in the most recently reported period, the largest single holder adding to a 9.3% stake. Goldman Sachs Asset Management added nearly 2.9 million shares. Norges Bank, however, moved in the opposite direction — cutting its position by 7.5 million shares. FMR (Fidelity) added 3.2 million. The net picture is one of selective accumulation at large index and active houses while a major sovereign wealth fund reduced its exposure. The insider activity from May 11 — a cluster of seven directors all selling roughly 616 shares each at $26.38 — appears to be routine compensation-related sales rather than a directional signal, given the near-identical volumes and the low significance scores attached to each transaction.
Earnings history shows sharp one-day swings in both directions. The April 17 print produced a 6.2% jump on the day. The March 27 release triggered a 5.2% drop. The five-day reaction in both cases faded almost entirely, suggesting the stock processes earnings news quickly and without lasting follow-through. With the next event scheduled for June 22, the next five weeks will test whether the gap between the current price and the $34 mean target is a value opportunity or a sign the Street is behind in cutting numbers.
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