Dan Victor, The Motley Fool

Wed, Jun 11, 2025, 2:35 PM5 min read

• Carnival continues to break multiple operating and financial records amid strong demand for its cruise vacations.

• The Walt Disney Company is benefiting from a resilient consumer spending environment, fueling its media and entertainment empire.

• One of these stocks appears undervalued and could be poised to outperform in the second half of 2025.

• 10 stocks we like better than Carnival Corp. ›

Leisure and entertainment giants Carnival (NYSE: CCL) and The Walt Disney Company (NYSE: DIS) offer an abundance of options for anyone thinking about taking a vacation this summer. The two companies can also represent compelling investments, with both stocks gaining momentum in recent months.

Can the rally keep going? Let's discuss whether shares of Carnival or Disney are the best buy for your portfolio right now.

As the world's largest cruise line operator, Carnival is capitalizing on an industry renaissance, with data suggesting that this form of vacation travel is more popular than ever. Efforts to optimize its fleet and enhance financial efficiency are paying off, with the company posting multiple operating records.

In the first quarter (for the period ended Feb. 28), Carnival management noted "incredibly strong demand," which helped results outperform prior guidance. Revenue of $5.8 billion increased 7.5% year over year, fueled by climbing capacity and higher pricing. Carnival ended the quarter with $7.3 billion in customer deposits for future voyages, surpassing last year's $7 billion record.

Even more impressive has been Carnival's ability to control costs, translating into surging profitability. Adjusted earnings per share (EPS) of $0.13 reversed a loss of $0.14 in the prior-year quarter, underscoring the company's newfound financial consistency. The expectation is for these trends to continue. The launch of Celebration Key, a new private island destination opening in July, and the delivery of three new ships by 2028 should drive further growth.

Carnival is guiding for full-year EPS of $1.83, representing $2.5 billion in adjusted net income and marking a 29% increase from 2024's result. The outlook is encouraging as it should allow the company to improve its balance sheet. The current total debt position of $27 billion is favorably down $4 billion over the past year. Deleveraging should support a higher valuation for Carnival stock, which trades at just 13 times its 2025 EPS forecast as a forward price-to-earnings (P/E) ratio, notably at a large discount to Disney stock's forward P/E of 20.