Carnival's (CCL) financials are unlikely to benefit from any improvement in booking trends this year, considering that Europe is almost entirely booked and a full quarter of headwinds from the prolonged Middle East crisis, UBS said in a research report emailed Wednesday.

The company had trimmed its fiscal 2026 yield guidance by 100 basis points at the top end, amid the Middle East conflict that drove airfare higher and subsequently impacted the cost of a cruise to a customer, analysts wrote.

The downwardly revised guidance is also due to changes on the remaining 15% of inventory for 2026, indicating that yield change on those remaining cruises is 600 bps to 700 bps worse than expected earlier, according to the note.

The company highlighted that since March, booking volumes are tracking ahead from a year earlier, and the geopolitical impact on demand seems transitory, according to UBS.

The brokerage said it reiterated its buy rating on the stock and price target of $35 per share.

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