Prediction: Carnival Stock Will Soar Over the Next 5 Years. Here's 1 Reason Why.

Core Viewpoint - Carnival's stock, once a strong value investment, is recovering from pandemic-related setbacks, with revenue exceeding pre-pandemic levels and strong demand for cruises [1][3]. Financial Performance - Carnival's revenue has reached all-time highs, with adjusted net income of $174 million in the first quarter of fiscal 2025, surpassing guidance [3]. - The company has seen robust demand, with ticket sales at high prices and strong onboard spending [3]. Debt Situation - The company incurred significant debt of$27 billion to maintain operations during the pandemic, which continues to impact its financials [4]. - Carnival has been actively paying down debt, having reduced it by $0.5 billion in the first quarter and over$3 billion in 2024 [6]. Future Outlook - As interest rates decline, Carnival has been able to negotiate better terms on its debt, refinancing $5.5 billion in the first quarter, leading to annualized savings of$145 million [5]. - If the company continues its current pace of debt repayment, it could return to pre-pandemic debt levels in five years, positioning itself for potential stock price appreciation [6].