What happened

This week has not been a fun time to own shares of Carnival (CCL -0.34%) (CUK -0.22%). For three straight days, shares of the cruise tourism giant have gone nowhere but down. Including today's 3.4% slide through 1 p.m. ET, Carnival stock has lost more than 10% of its value since the week began.

That's curious, though -- because it turns out, the news on Carnival this week actually isn't all bad.

So what

On Tuesday, you see, investment banking heavyweight J.P. Morgan waded back into the cruise space with a trio of stock initiations. Carnival rival Royal Caribbean got hit with an underweight (sell) rating while Norwegian Cruise Line Holdings was blessed with an overweight (buy) rating. Carnival got a more muted neutral rating -- but here's the good news: J.P. Morgan thinks Carnival stock is worth $13.

As ratings watcher StreetInsider reports, J.P. Morgan may only be neutral on Carnival, but the fact that Carnival has lost 52% of its market capitalization this year -- twice the losses suffered by either Royal Caribbean or Norwegian Cruise -- may be an overreaction. Rather than the $9 share price that investors currently ascribe to it, J.P. Morgan thinks the stock could be worth 44% more.  

Now what

Emphasis on could be.

Carnival has more than its fair share of troubles, as even J.P. Morgan admits. The company appears to be discounting fares heavily to sell cruises on its ships, even as rising fuel costs make it harder to earn a profit on those fares. Its fleet is aging -- implying the potential for higher-than-average capital spending to update the fleet in future years. And Carnival is carrying a $35.3 billion debt load that cost the company $1.6 billion in interest payments alone last year -- and interest rates have been going up, not down, in 2022, meaning future interest costs should be even higher.

Still and all, most analysts polled by S&P Global Market Intelligence see Carnival generating pre-tax (and pre-interest) profits of more than $2.2 billion next year, which should be enough to cover Carnival's debt costs and even eke out a small profit of $0.65 per share. In that regard, Carnival's first profitable quarter is expected to arrive in the third quarter of 2023.

That's the one investors should keep an eye on, because if Carnival starts warning that even Q3 might end up unprofitable, then all bets are off -- and Carnival stock could go down even more.