3 Reasons to Buy Carnival Before Tuesday, and 1 Reason to Sell

It's time for Carnival Corp. (NYSE: CCL) to drop its quarterly anchor. The world's largest cruise line operator will announce its fiscal second-quarter results before Tuesday's market open. The bellwether will offer a sneak peek for how other cruise line stocks will fare later this summer, with Carnival's fiscal year ending a month earlier than those of its peers.

Buying ahead of a financial update isn't for the timid. Stocks move on earnings news, and Carnival shares are likely to be volatile following its earnings release and its subsequent conference call, which will start a half-hour into the trading day. There are plenty of good reasons to believe that Carnival will fare well, but let's also not lose sight of what can bring the shares lower.

Expectations are high for the industry's top dog in terms of revenue and passenger volume -- at least on the bottom line. Analysts are modeling $6.21 billion in revenue out of Carnival for the three months ending in May, a modest 7.5% increase. That follows an identical 7.5% year-over-year step up in the fiscal first quarter. Carnival was consistently posting double-, triple-, and even quadruple-digit top-line growth coming out of the pandemic until this fiscal year.

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