Below are the valuation targets for Carnival Corp. (CCL) for the next 10 years.
Our valuation targets for Carnival Corp. (CCL) in 2019 are:
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$109.16 (overvalued)
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$78.67 (fair value)
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$48.18 (undervalued)
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$31.78 (extreme undervalue)
The valuation targets for Carnival Corp. (CCL) are based on a dividend growth rate of 2.50% which is derived from the annual 10-year growth rate as indicated on the Value Line Investment Survey dated November 2, 2018 and applied to Edson Gould’s Altimeter. A graphical representation of the overvalued, fair value, and undervalued levels are below.
The above Altimeter translates into the following undervalued and overvalued ranges since 2006:
10-Year Targets
| Undervalued | Fair Value | Overvalued | Extreme Undervalue | |
| 2018 | $47.00 | $76.75 | $106.50 | $31.00 |
| 2019 | $48.18 | $78.67 | $109.16 | $31.78 |
| 2020 | $49.38 | $80.64 | $111.89 | $32.57 |
| 2021 | $50.61 | $82.65 | $114.69 | $33.38 |
| 2022 | $51.88 | $84.72 | $117.56 | $34.22 |
| 2023 | $53.18 | $86.84 | $120.49 | $35.07 |
| 2024 | $54.51 | $89.01 | $123.51 | $35.95 |
| 2025 | $55.87 | $91.23 | $126.60 | $36.85 |
| 2026 | $57.26 | $93.51 | $129.76 | $37.77 |
| 2027 | $58.70 | $95.85 | $133.00 | $38.71 |
| 2028 | $60.16 | $98.25 | $136.33 | $39.68 |
| 2029 | $61.67 | $100.70 | $139.74 | $40.67 |
| 2030 | $63.21 | $103.22 | $143.23 | $41.69 |
| 2031 | $64.79 | $105.80 | $146.81 | $42.73 |
Observations
According to Value Line Investment Survey, Carnival Corp. (CCL) has an expected price range of $85-$125 by 2021-2023. On our end, we have a range from as low as $50.61 to as high as $120.49 in the same period of time.
A concern that we have with Carnival Corp. (CCL) is that the company employs an aggressive dividend policy in good times that requires being reigned in when the stock is slumping. This makes it necessary to watch for the extreme undervalued level as a natural reaction to the sharp dividend increases since 2015 as well as a possible dividend cut.
Last updated: January 8, 2019