Despite clear signs of recovery from Carnival Corporation (CCL 0.43%) (CUK 0.63%), the cruise line stock is still down 87% from its 2018 all-time high on investor concerns about the travel industry and the economy. Yet, for farsighted investors who can look ahead, there are some good reasons for optimism. Here are my top four reasons to be bullish on Carnival stock today.

1. Better-than-expected earnings in the first quarter

For Carnival's fiscal Q1, which ended on Feb. 28, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) exceeded company expectations, hitting $382 million. A combination of better net per-diems, higher ticket prices, and increased occupancy helped drive the better-than-expected earnings result.

For Q2, management projects an adjusted EBITDA of $600 million to $700 million, or a substantial 57% to 83% sequential improvement over Q1.

2. Occupancy and capacity on the rise

In another stunning win last quarter, Carnival's occupancy rate reached 91%, up 37 percentage points from its 54% occupancy rate a year ago. Interestingly enough, occupancy rose amid increasing capacity -- now anticipated to surpass 2019 levels by 4.5% this year.

In other words, even with more staterooms to fill than last year, Carnival still packed a higher percentage of guests aboard. Although the company has retired 26 ships since 2019, it unveiled 12 new (and bigger) ships during that same time. According to CEO Josh Weinstein, Carnival's new ships are 9% more fuel efficient and 6% more operationally efficient than previous vessels.

3. Long-term debt has now peaked

Since pre-pandemic 2019, Carnival's long-term debt has more than tripled. A "no sail order" announcement in March 2020 led to a 15-month shutdown for the cruise industry, and Carnival's debt expanded substantially from there.

But during the Q1 earnings call late last month, CFO David Bernstein declared that Carnival is now "beyond the peak" of its total debt. After cresting at more than $35 billion in Q1, Bernstein now anticipates long-term debt to shrink to $33.5 billion by year's end.

Positive as of last quarter, Carnival's adjusted free cash flow is expected to stay above water for the remainder of 2023. Armed with free cash flow and projected revenue and gross margin growth, Bernstein and team is now seeking to "drive down our debt balances on our path back to investment grade."

4. Carnival's best booking season in company history

While Carnival enjoyed banner Black Friday and Cyber Monday reservation sales last year, that was only the tip of the iceberg. In fiscal Q1 2023, the cruise line booked its highest volumes in company history across its North American, Australian, and European segments.

Carnival's North American segment set new booking records each and every week in January and February, and booking momentum carried into March. During the Q1 earnings call, CEO Josh Weinstein stated, "Booking volumes for our North American brands have been running in excess of record 2019 levels for the last six months, and booking lead times are now back to peak levels."