Carnival (CCL -0.79%) is firing on all cylinders right now. The business is seeing strong demand and posting record revenue. Shares have soared 45% in the past 12 months, rising faster than the broader S&P 500.
But this cruise line stock still has a long way to go to generate a positive investment return for some of its longtime shareholders. These investors are likely still very much in the red.
Along the same vein, what's the highest price Carnival shares have ever traded for? And can the stock get to that level again?
Smooth sailing
In January 2018, shares of Carnival established their all-time high price of $66.19. This was a successful investment, as it soared 86% in the five years prior to reaching this milestone.
Of course, this was achieved thanks to impressive financial performance. Between fiscal 2012 and fiscal 2017, diluted earnings per share rose at an annualized pace of 16.5%. Consumers were very much interested in taking cruise ships thanks to the favorable macro backdrop.
Recovery mode
Carnival shares were already in the midst of a major downtrend even before the coronavirus pandemic disrupted everything. In 2020, the business was forced to halt operations, which dried up revenue. Carnival had to raise massive amounts of debt just to stay afloat.
As of this writing, the stock trades 79% below its peak. This is despite the company reporting record sales of $5.4 billion in the three-month period that ended Feb. 29 (Q1 2024).
The dip is likely because Carnival is in a troubled financial situation. It has posted a massive cumulative net loss in the past few years, although the business could finally be turning toward consistent profitability in the not-too-distant future. Carnival currently carries $31 billion of debt on the books.
For the stock to get back to its high-water mark, it would need to skyrocket 339%. Never say never, but that seems like a tall order that won't happen for a very long time, if ever.
