Carnival's 2Q26 results were mixed, with the cut to FY26 net yield guidance being the core negative surprise

Overview

This report is Goldman Sachs' first take on Carnival Corp.'s 2Q26 results and updated FY26 outlook. The company's quarterly earnings metrics beat expectations, but management lowered FY26 constant-currency net yield growth guidance by 1 percentage point to about 1.75%, which the report views as the key negative surprise. The report emphasizes that market expectations had already moved materially higher and recent price checks had broadly improved, so this cut to net yield guidance and the commentary on booking trends may become the dominant drivers of the near-term share price reaction.

Core views

The core view is that CCL's earnings quality is mixed: costs, fuel, cost savings, and buybacks support EPS, but the deterioration in demand and yield signals matters more. The company reported 2Q26 adjusted EBITDA and EPS above expectations, and constant-currency net yield growth of 2.2% also exceeded March guidance of 2.0%, but was below GS's forecast of 2.4%. More importantly, FY26 constant-currency net yield guidance was reduced from about 2.75% to about 1.75%, and 3Q26 net yield guidance is about 1.2%, below GS's forecast of about 3.0%. The report believes investors will focus more on booking trends than on the positives from costs.

Analysis framework

The report analyzes the results by comparing them with expectations, comparing the company's new and prior guidance, breaking down 3Q26 and FY26 segment guidance, and reassessing the target-price valuation framework. It focuses on differences in metrics such as adjusted EBITDA, EPS, constant-currency net yield, and NCC ex-fuel per APCD/ALBD relative to GS estimates, Visible Alpha consensus expectations, and prior company guidance.

Methodology notes

• Valuation FrameworkBlended EV/EBITDA and P/E valuation

  50%/50% blended valuation

  Goldman Sachs values CCL using 50% of 2027E EV/EBITDA at 9.0x and 50% of 2027E P/E at 13.5x, deriving and maintaining a $36 target price.

• Factor FrameworkGS Factor Profile

  Growth, financial returns, valuation multiples, and composite percentiles

  This framework compares stocks against the market and industry peers on a percentile basis using forward sales, EBITDA, and EPS growth, financial return metrics such as ROE, ROCE, and CROCI, and valuation multiples such as P/E, P/B, and EV/EBITDA.

• M&A Scenario FrameworkM&A Rank

  Acquisition probability tiers

  Goldman Sachs uses an M&A rank from 1 to 3 to assess the likelihood that a covered company becomes an acquisition target, where 1 indicates high probability, 2 medium probability, and 3 low probability; if ranked 1 or 2, the target price may include an M&A component.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• CCL.N

  Research target

  Strengths

  2Q26 adjusted EBITDA and EPS were above GS and market consensus expectations; cost guidance improved, and fuel and FX had a limited net impact on guidance; the target price remains at $36.

  Weaknesses

  FY26 constant-currency net yield guidance was cut by 1 percentage point, and 3Q26 net yield and EBITDA guidance were below GS expectations; the company said it is only just beginning to see the relevant headwinds reverse in recent booking trends.

  Comparison

  The report notes that RCL had already pointed to improving European trends during its late-April 1Q earnings release, making CCL's commentary on booking trends this time more surprising by comparison.

  Risks

  Higher-than-expected supply, slower European consumer demand, rising fuel prices, exogenous events, and weaker consumers could all pressure earnings.

Key data

• 2Q26 adjusted EBITDA$1.58bnAbove GS/consensus expectations of about $1.48bn/$1.47bn, and also above the company's $1.48bn guidance.
• 2Q26 adjusted EPS$0.41Above GS/consensus expectations of $0.33, and also above the company's guidance of about $0.34.
• 2Q26 constant-currency net yield growth+2.2%Below GS's forecast of +2.4%, but above March guidance of 2.0%.
• New FY26 constant-currency net yield growth guidance~+1.75%Previously about +2.75%; after normalizing for the loyalty program accounting treatment and the impact of Arabian Gulf itinerary adjustments, about +2.25% versus previously about +3.25%.
• FY26 adjusted EBITDA guidance~$7.11bnPreviously $7.19bn; improved cost expectations were offset by lower yield guidance.
• FY26 adjusted EPS guidance~$2.22Previously $2.21, a slight upward revision.
• 3Q26 constant-currency net yield growth guidance~+1.2%Significantly below GS's estimate of about +3.0%.
• 3Q26 adjusted EBITDA guidance~$2.88bnBelow GS's estimate of about $3.04bn.
• 3Q26 adjusted EPS guidance~$1.35Below GS's estimate of about $1.39.
• 12-month target price$36.00Unchanged.

Impact & implications

For investment implications, the short-term focus may shift from the realized earnings beat to uncertainty around future bookings and net yields. The FY26 yield cut suggests that pricing or demand momentum in the second half may be weaker than the market had previously expected. Even with favorable cost and fuel assumptions and a slight upward revision to EPS guidance, that may not be enough to offset investor concerns about the quality of revenue-side performance. The pace of recovery in European demand, whether recent booking trends can reverse, and disruptions from Middle East conflict and itinerary changes will be key to whether valuation recovers or faces further pressure.

Risks

• Higher-than-expected supply could have a disproportionately negative impact on pricing.
• A slowdown in European consumer demand or a longer-than-expected recovery could have a meaningful impact on CCL, given the company's relatively high exposure to Europe.
• Rising fuel prices are a key risk, as the company does not hedge fuel exposure the way some peers do.
• Exogenous events such as illness, hurricanes, mechanical failures, and geopolitical risks could lead to vessel shutdowns, itinerary adjustments, and weaker consumer confidence.
• Consumer weakness could reduce overall leisure travel demand, thereby pressuring earnings.

What to watch

• Whether subsequent booking trends truly reverse, and whether the speed of reversal is sufficient to support second-half yields.
• Whether the approximately 1.2% 3Q26 constant-currency net yield guidance can be achieved or revised upward.
• After FY26 net yield was cut from about 2.75% to about 1.75%, whether the market further lowers full-year revenue and profit expectations.
• The recovery in European demand, and whether regional trends disclosed by peers such as RCL diverge from CCL.
• The ongoing impact of fuel prices, Middle East conflict-related logistics costs, and itinerary adjustments on costs and yields.