CUK
Carnival Corporation & plc
$27.47
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 66.0% below fair value
You pay
$27.47
Bear
$64.62
Fair
$80.77
Bull
$96.93
Bear
$64.62
+135.2%
$3.59 × 18x P/E
Fair
$80.77
+194.0%
$3.59 × 22x P/E
Bull
$96.93
+252.9%
$3.59 × 27x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
7.7x
Summary
Applying a 22x P/E to adjusted EPS of $3.59, the base-case value is $80.77 per share. DDM cross-check: $76.16.
Warnings
The company's reported profits differ from official accounting profits by 78%. Check what costs are being left out of the adjusted number.
The company pays out 82% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples