Wall Street analysts have pointed to continued earnings momentum and improving long-term outlook following Carnival Corp (NYSE:CCL)’s first quarter 2026 results, while noting that fuel costs remain a key source of near-term uncertainty.

Bank of America maintained its ‘Buy’ rating and $45 price objective on the cruise operator, describing the quarter as featuring “several positives,” including a continuation of earnings momentum, a new $2.5 billion share repurchase program, and updated long-term targets under the company’s Propel initiative. The firm noted that first quarter performance included an earnings-per-share and net yield beat, reinforcing recent trends.

At the same time, the bank’s analysts cautioned that “near-term fuel will create earnings volatility,” adding that higher energy prices and geopolitical factors could leave some consumers in a “wait and see mode.” They characterized these pressures as short term and pointed to valuation, stating the shares trade near historical trough levels.

On operations, Bank of America said booking trends have not materially deteriorated, although demand may have been somewhat softer than it otherwise would have been due to macro factors. The company remains about 85% booked for 2026, which the analysts view as providing time for normalization.

The firm also highlighted Carnival’s updated “Propel” targets, which call for more than 50% earnings-per-share growth through 2029 and return on invested capital above 16%. Bank of America estimates this implies a roughly 10% annual EPS growth rate, with capital returns of about $14 billion over the period, equivalent to more than 40% of the company’s current market capitalization.

UBS similarly emphasized the strength of the first quarter results and the implications for full-year guidance.

The analysts noted that Carnival raised its fiscal 2026 yield outlook by 25 basis points to 2.75%, “mostly passing along the Q1 beat,” though it added that the magnitude of the quarterly outperformance was likely ahead of expectations.

The firm also pointed to improved cost performance excluding fuel, with net cruise costs guidance benefiting from first-quarter trends. However, higher fuel prices remain a meaningful offset, with UBS estimating roughly $500 million in additional fuel costs for the year, partially mitigated by about $150 million in stronger operational performance.

Despite these pressures, UBS said Carnival remains on track for approximately $7 billion in EBITDA for fiscal 2026, only modestly below prior expectations, with earnings per share reduced by less than the increase in fuel costs.

Like Bank of America, UBS highlighted the company’s long-term targets under the Propel program. The bank said the goal of 50%+ cumulative EPS growth through 2029 implies double-digit annual growth and aligns with expectations for continued improvement in yield and cost metrics. It also underscored plans to return more than 40% of operating cash flow to shareholders, including dividends of over $800 million annually and significant share repurchases.

On demand trends, UBS described bookings as strong, with 2026 occupancy already at about 85% and pricing at “historically high levels.” Regional trends have been mixed, with stronger recent demand in the Caribbean and Alaska, alongside some shifts in European itineraries, the analysts added.

For the second quarter, UBS noted that guidance reflects the impact of higher fuel prices, with earnings and EBITDA projections coming in below prior expectations that had not yet incorporated the latest increase in energy costs.

Shares of Carnival traded hands at $24 late morning on Monday.