Loop Capital Starts Viking Holdings (VIK) at Buy

Loop Capital analyst Laura Champine initiates coverage on Viking Holdings (NYSE: VIK) with a Buy rating, PT $55.00.

The analyst comments "We are initiating coverage of the cruise lines, with a Buy rating on Viking, VIK, and Hold ratings on Carvinal, CCL, Norwegian Cruise Line, NCLH, and Royal Caribbean, RCL. Our $55 PT on VIK represents 10% near-term upside, while our PTs on the legacy cruise lines of $25 on CCL, $26 on NCLH, and $250 on RCL are near current share prices. All our price targets are based on our discounted NOPAT models, and our optimism for VIK is driven by a higher expected growth rate and less debt. Though we are favorably disposed to the entire cruise industry, we think a demand recovery and balance sheet improvement is already in the stocks of legacy cruise lines CCL, NCLH, and RCL. These stocks are at peak valuations, with adjusted EBITDA margins sustainably above peak in our view. We think the direction of the stocks in 2025 will be driven by whether there is a material demand slowdown, and we'll wait until more cruise lines provide 2025 guidance to weigh in with more confidence. Viking is relatively underlevered and has better growth prospects in our opinion as it is the smallest public cruise line and operates significant river-based operations in addition to its much more nascent ocean ships. We also see the company's IPO as a signal that the line is more likely to focus on profitability, and we believe the company has several levers to pull on that front."

For an analyst ratings summary and ratings history on Viking Holdings click here. For more ratings news on Viking Holdings click here.

Shares of Viking Holdings closed at $50.12 yesterday.

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