Carnival Corp (CCL) shares climbed over 5% Thursday afternoon, riding a wave of positive sentiment that swept through the cruise industry after rival Royal Caribbean announced a hefty $2 billion share repurchase program.

The timing couldn't be more interesting, with Carnival set to report its fourth-quarter earnings results next week on December 19.

Why Cruise Stocks Are Sailing Higher

The cruise sector is catching multiple tailwinds right now. Beyond Royal Caribbean's buyback news, the Federal Reserve's decision Wednesday to cut interest rates by 25 basis points to a range of 3.5%-3.75% is making life easier for these capital-intensive businesses. Lower borrowing costs matter when you're operating massive floating resorts.

Analysts are forecasting Carnival will report earnings per share of 24 cents on quarterly revenue of $6.37 billion when numbers drop next Thursday.

Carnival's Recent Momentum

The company has been on a roll. Back in September, Carnival delivered a record-breaking third-quarter report and raised its full-year 2025 outlook for the third time, projecting adjusted EBITDA of approximately $7.05 billion. CEO Josh Weinstein highlighted that booking momentum was outpacing capacity growth, with nearly half of 2026 already booked at historically high prices.

That's the kind of forward demand that gets investors excited.

Different Strategies, Same Industry

Here's where things get interesting. While Royal Caribbean is confident enough to buy back billions in stock, Carnival is taking a different approach. The company has prioritized what management calls "strengthening its financial fortress" through deleveraging. They recently announced the redemption of convertible notes, aiming to improve their net debt-to-EBITDA ratio to 3.5x by early 2026.

Wall Street remains cautiously optimistic about the story. On December 1, Wells Fargo maintained its Overweight rating on Carnival but trimmed the price target from $37 to $34.

What the Numbers Show

Carnival shares traded up 5.97% at $27.86 Thursday, positioning the stock about 2.3% above its 50-day moving average of $27.33 and 9% above its 200-day moving average of $25.65. Those technical indicators suggest a solid bullish trend in the short to medium term.

The big question now is whether holiday demand can sustain the industry's upward trajectory. Investors will be watching closely when Carnival reports next week to see if the booking strength continues.