Could This Bull Market Buy Help You Become a Millionaire?

Carnival (NYSE: CCL) (NYSE: CUK) suffered during the early days of the pandemic, but this cruise giant has proven its ability to weather tough times -- and go on to recover and grow. The company has soared past analysts' earnings estimates quarter after quarter and reported various records, from revenue levels to bookings.

This is all due to renewed demand for cruise travel, Carnival's leadership in the market (it's the world's largest cruise operator), and the company's efforts to favor growth and profitability. Generally, a cruise company may represent a bull market buy, as a strong market and economy offer this type of company a favorable environment in which to grow and expand. In addition, potential travelers, with more money in their pockets, are more likely to plan vacations.

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Could this bull market buy help you become a millionaire?

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Carnival's stock performance

First, it's important to note that Carnival's successes have started to translate into stock performance. The stock has climbed about 24% over the past year, though it's slipped in recent weeks amid concerns about the general economic environment and the possibility of U.S. taxation on cruise operators.

One concern is that tariffs on imports could support higher prices on a number of goods, and companies may pass these along to customers, leaving the consumer with less money to spend on discretionary items and travel. As for taxation, cruise companies incorporated in Panama or Liberia meet tax exemption requirements, but the U.S. commerce secretary recently expressed plans to change that and impose taxes on them.

These potential problems wouldn't be good news for Carnival or cruise companies, in general. But it's important to remember that Carnival is in a much better financial situation than it was in the early pandemic days, when sailings came to a halt, the company shifted to a loss, and debt ballooned to about $34 billion. Carnival has since prepaid more than $7 billion, with a focus on variable-rate borrowings, and brought its debt level down to about $27 billion, as of the end of the latest full-year earnings period.

Proven ability to handle a challenge

Carnival's ability to manage those tough times suggests it also could handle other potential challenges, such as taxation or a tougher economy. Though these elements might weigh on the stock in the near term, I wouldn't expect them to dismantle the company's long-term growth story.

Now I'll consider Carnival's earnings progress to see just how far this company has come since the early pandemic days. Carnival has surpassed analysts' earnings-per-share (EPS) estimates for at least the past four quarters, and key metrics that highlight demand and return on investment are reasons to be optimistic about the company's future. For example, in the latest quarter, the cumulative advanced booked position for full-year 2025 rose to a record high in terms of price and occupancy. And adjusted return on invested capital (ROIC) reached 11%, meaning Carnival is 80% of the way to achieving its 2026 adjusted ROIC goal.

It's important to note that Carnival's full-year revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also hit records, more evidence that Carnival hasn't only recovered from tough times but also is growing. Revenue came in at $25 billion for the year, and adjusted EBITDA reached more than $6 billion for a 40% gain year over year.

It's true that Carnival may face some near-term challenges due to the economy or new Trump administration policies. But the company today is excelling and has demonstrated it has what it takes to handle times of trouble.

Could Carnival help bring you millions?

Now I'll return to the original question: Could Carnival help you become a millionaire? It's possible, if the stock is part of a well-diversified portfolio and held for a number of years.

Companies like Carnival are sensitive to economic news and the general economic environment -- so when these generate uncertainty or if the economic situation sours, the stock could suffer. But the good news is during better economic times, Carnival shares may take off. And that's why it's important to buy a stock like Carnival when it's cheap -- such as today, trading at 11x forward earnings estimates -- and hold on for the long term, to benefit from times of strong stock performance.

The current stock market probably won't offer you an overnight gain, but Carnival may have what it takes to help power your potential millionaire-maker portfolio over the long run.

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.