Ready for the New Year: Two Stocks Worth Monitoring until 2025
Alright folks, let's kick off this new year with a surprise! Instead of those resolutions you're probably not going to stick to, how about investing in some long-term stocks? I've got two suggestions that might just make your 2025 a little brighter: Carnival Cruise Lines and On Holding.
First up: Carnival Cruise Lines, or as I like to call it, the cruise line that took one heck of a hit during COVID-19 but is now swimming back up. Sure, their revenues were sliced by a whopping 73% in 2020 and 65% in 2021, but they're not giving up without a fight. In fact, they've managed to rally more than 40% over the last 12 months.
Looking at their recent financials, they've posted some impressive numbers. Take the fourth quarter, for example. They reported net income of over $300 million, a far cry from their net loss of $48 million in the previous fiscal year. Revenues for that quarter were a massive $5.9 billion. They've even reported revenue growth of 15% year over year, reaching a record $25 billion for the full year.
But wait, there's more! Their 2025 guidance is projected to have adjusted net income over 20% higher than 2024, beating estimates over the last four quarters, and showing earnings of $1.75 per share. With a P/E ratio of 14.73 times forward earnings, it seems that the demand for cruise ships is stronger than we thought.
Now, if you're wondering if Carnival's turnaround is sustainable, well, Fool.com contributor Jennifer Saibil has some interesting thoughts. She points out that Carnival is reducing debt and has achieved stronger free cash flow. So, as long as that continues, the stock could possibly go higher.
But hey, that's not all! Let's jump on board with On Holding, also known as the Swiss-based sports shoe and apparel company that's giving the industry giants like Nike and Under Armour a run for their money. Over the last few weeks, there's been a lot of chatter about Nike amid their earnings report and new CEO's refocus on sports. But On Holding? They've been creating growth that puts Nike to shame.
In their latest quarter, they reported revenue (represented as net sales in their financials) of 635.8 million Swiss Francs, representing a 33.2% year-over-year increase. On a U.S. dollar basis, that's $733.8 million. And don't even get me started on their cash flow. On Holding has an 88% increase in cash on their balance sheet, totaling nearly $888 million.
Opening up their future outlook, they've raised their full-year 2024 net sales growth outlook to at least 32% on a constant currency basis. Plus, they're expected to beat full-year profitability. It's a pricier stock compared to Nike, but with results that drastically outpace it, it seems worth a second glance.
So there you have it. Two stocks that could help make your 2025 a little brighter. Happy investing, and here's to a great year ahead!
Enrichment Data:
Carnival Cruise Lines (CCL)
- Strength in financial performance and projected growth
- Debt reduction strategy to boost resilience and bottom line
- Focus on yield growth through pricing optimizations and onboard revenue enhancements
- Positive industry trends and demand, with strong cruise sector bookings and pricing data
- Long-term growth plans to increase capacity at private destinations by 50% by 2030
- Predicted stock price increases of $41.25 by 2025 and $55.60 by 2030
On Holding (ONON)
- Rapid revenue growth, outpacing competitors like Nike and Under Armour
- Increasing net income and strong cash flow, signifying profitability
- Anticipated beat in full-year profitability and sales growth outlook
- Valuation may be a red flag due to high price relative to earnings, but top-line growth serves as compensation.
- Despite facing significant revenue losses due to the COVID-19 pandemic, Carnival Cruise Lines has shown resilience, reporting a net income of over $300 million in the fourth quarter of 2021 and a record $25 billion for the full year.
- The turnaround of Carnival Cruise Lines seems to be sustainable, as they've implemented a debt reduction strategy and achieved stronger free cash flow, reducing their reliance on finance and stabilizing their bottom line.
- With On Holding, the Swiss-based sports shoe and apparel company, showing revenue growth of 33.2% year-over-year in their latest quarter and a predicted full-year profitability beat in 2024, they're proving to be a formidable competitor, outpacing industry giants like Nike.
- As a long-term investor, planning beyond 2024, Carnival Cruise Lines has projections of adjusted net income over 20% higher than 2024, creating potential stock price increases, while On Holding's rapid revenue growth may result in higher stock values as they challenge established competitors in the sports apparel industry.
