This cruise ship operator's outlook is looking brighter. An options strategy for its rebounding stock

Carnival Cruises (CCL) has completed one of the most successful corporate turnarounds in the post-pandemic travel industry, and the market is now beginning to reflect that transformation. After spending the last three years focused on paying down debt, CCL has entered a new phase, centered on expanding profit margins and shareholder returns. The reinstatement of the dividend and accelerating free cash flow have shifted the perception from recovery to compounding growth. As cruise supply remains tight and pricing power improves, Carnival’s earnings power is growing stronger. Trade timing & outlook Bullish breakout: The stock has broken out above a multi-month resistance level at $32.50 that capped rallies throughout 2025. Relative strength: CCL continues to outperform the S & P 500, signaling potential ,institutional accumulation. If the breakout holds, the next technical target projects toward the $40 zone, based on prior consolidation ranges. Fundamentals Carnival trades at a substantial discount to its peers, despite growth and profitability metrics that align with industry rivals: Forward P/E: ~13x vs. industry ~17x Expected EPS growth: ~12.6% vs. industry ~12.1% Expected revenue growth: ~4.2% vs. industry ~5.9% Net margins: ~10.4% vs. industry ~9.9% With debt reduction largely complete and capital expenditures moderating in 2026, incremental cash flow is increasingly flowing to equity holders. Bullish thesis Cash flow pivot: With no major ship deliveries in 2026, operating cash flow is being redirected toward dividends and further debt reduction. Pricing power: Limited industry capacity growth supports sustained yield expansion. Balance sheet: Declining leverage and refinancing savings of $700 million per year — versus fiscal year 2023 — are directly lifting earnings per share. Options trade To express a bullish view with defined risk and income, I’m looking at Selling the Mar 27, 2026 $33 / $30 Put Vertical @ $1.20 Credit. This entails: Selling the Mar 27, 2026 $33 Put Buying the Mar 27, 2026 $30 Put Max risk: $180 per contract if CCL is below $30 at expiration Max reward: $120 per contract if CCL is above $33 at expiration This structure benefits from continued strength or consolidation above breakout support while still generating income. View this Trade with Updated Prices in OptionsPlay Summary Carnival has successfully transitioned from a leveraged recovery story into a disciplined cash-flow compounder. With a confirmed breakout, improving balance-sheet quality, and renewed capital returns, CCL offers attractive upside with downside support from its dividend. For investors seeking exposure to the travel recovery with discounted valuations, Carnival presents a compelling, risk-adjusted bullish setup. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.