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Key Takeaways
- Viking Holdings shares advanced Tuesday as several analysts began coverage of the cruise line with bullish comments.
- Bank of America Securities began coverage with a “buy” rating and price objective of $35. JPMorgan analysts gave it an “overweight” rating and a price target of $34.
- Both research teams pointed to Viking’s “unique” position in the cruise market and high-end business model.
- Viking shares gained close to 3% in intraday trading Tuesday at $30.48 as of 2:45 p.m. ET.
Viking Holdings (VIK) shares gained close to 3% in intraday trading Tuesday after several analysts initiated coverage of the cruise line with bullish comments about its outlook.
Bank of America Securities gave Viking a “buy” rating, with a price objective of $35. The analysts said that the recently listed company was “well-positioned in the industry given its superior returns and unit economics, growth profile, and balance sheet.”
BofA Praises ‘High-End Business Model’
BofA said Viking had a “unique, high-end business model” with daily net per diems of more than $500, better than other cruise lines, other all-inclusive resorts, and publicly traded hotel companies. It added that Viking’s business is predictable, with the average customer itinerary booked 11 months in advance.
JPMorgan rated Viking “overweight,” with a price target of $34, and pointed to Viking’s specific customer target of affluent, English-speaking travelers who are 55 years old or older, noting that this age group is the fastest-growing population in the U.S. and holds 70% of all U.S. wealth, according to the investment bank.
JPMorgan analysts said that Viking also controls 51% of the river cruise market, has priority access to 97% of docking locations, and its management has more than 20 years’ experience in providing its service. They noted that the company’s educational, destination-first focus, and “One Brand” marketing strategy is driving sustainable customer loyalty and high guest repeat rates.
UBS, Well Fargo Also Favor Viking With $35 Price Target
UBS reportedly issued a “buy” rating and $35 price target for Viking, while Wells Fargo gave it an “overweight” rating along with a $35 price target.
Viking’s stock began publicly trading on May 1 after the cruise line held the second-largest U.S. initial public offering (IPO) so far this year behind Amer Sports. Viking shares were nearly 3% higher at $30.48 as of 2:45 p.m. ET Tuesday and up 27% from their IPO price of $24.
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