Shares of cruise operator Carnival are trading at a discount due to the volatility of fuel prices, and investors should take advantage of this, according to HSBC. The bank improved rating of the company's securities from neutral position to recommendation to buy. At the same time it lowered the target price from $33.6 to $30.1, but the new target still assumes growth of 24%, CNBC <a href="https://www.cnbc.com/2026/03/30/buy-this-cruise-line-operator-thats-trading-at-a-discount-says-hsbc.html">writes</a>.

"While volatility is likely to persist in the short term, we believe the stock is attractive," the TV station quoted HSBC analyst Meredith Pritchard Jensen as saying in a note to clients on March 27. - In our view, the current share price largely already reflects fuel-related risks."

Carnival is sensitive to fluctuations in energy prices caused by the war with Iran because the company has "unhedged exposure" to the resource, HSBC noted. The cruise operator's shares have fallen 23.3 percent since the start of the conflict in the Middle East. "We recognize the higher uncertainty on [Carnival's] earnings in the short term compared to peers such as Royal Caribbean, which benefit from protection through derivatives," Jensen wrote.

At the same time, the analyst pointed out that Carnival's shares are trading at a P/E multiple, which reflects the price-to-earnings ratio, of around 10, compared with an average of 12.4 over the past two years, indicating undervaluation. Jensen added that the cruise operator is likely to be able to meet the operational challenges posed by the conflict in the Middle East due to its strong value proposition and ability to respond flexibly to changes in demand.

"The market is underestimating the resilience of demand for experiences (Carnival already has about 85% of its 2026 cruises booked at attractive prices), a strong value proposition (they are about 25% cheaper than land-based vacations), and a fleet of mobile assets that can be redeployed in response to demand," HSBC said in a note.

According <a href="https://www.marketwatch.com/investing/stock/ccl/analystestimates">to</a> MarketWatch, 21 of the 26 analysts tracking the cruise operator's securities advise buying them, while five advise holding. There are no recommendations to sell the stock. The Wall Street consensus price target is $35.6, suggesting a potential upside of 47% from the stock's closing level on March 27.

<i>This article was AI-translated and verified by a human editor</i>

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HSBC recommended buying shares in a cruise operator that has fallen in price because of the war in Iran