Shares of Carnival Corp (CCL  ) and other cruise companies came under pressure last week amid concerns around a tax crackdown in the US.

While demand in Europe remains strong, a potential ceasefire between Russia and Ukraine could boost the overall cruise industry, according to JPMorgan.

The Carnival Analyst: Analyst Matthew Boss maintained an Overweight rating and price target of $31.

The Carnival Thesis: Checks indicate "zero signs of Europe softening," with continued robust demand and 2025 pricing up by mid-to-high single digits, Boss said in the note.

The cruise industry's booked positions were strong entering the year and occupancy levels are returning to historical levels, he added.

The overall sentiment for global travel is positive, with a potential ceasefire between Russia and Ukraine providing "the next leg of yield strength," the analyst stated.

Carnival could be the "next cruise operator out of the Big 3" to resume shareholder returns, Boss said.

If Carnival begins by reinstating dividends, it could generate around $5 billion in free cash flow post-dividend during 2026-2027, which would "translate to mgmt being able to buyback ~10-15% of its outstanding shares," he further wrote.

CCL Price Action: Shares of Carnival were down 1% to $23.36 at the time of publication on Tuesday.