On Monday, Truist Securities updated its stance on shares of Viking Holdings (NYSE:VIK), increasing the price target to $49.00, up from the previous $38.00, while keeping a Hold rating on the stock. The target falls within the broader analyst range of $45-$56, according to InvestingPro data, which also reveals the stock is trading near its 52-week high of $47.62, having delivered an impressive 78% return year-to-date.
The firm's analyst highlighted Viking Holdings as a leading entity in the cruise sector, excelling in several key performance indicators such as return on invested capital (ROIC), capacity and earnings growth, as well as having a strong balance sheet. The analyst also noted Viking's potential to be the first in the industry to return capital to shareholders post-Covid.
The analyst's commentary included an observation that among the four public companies in the sector, Viking Holdings appears to have the least upside to revenue when compared to consensus expectations.
The valuation of Viking Holdings is noted to be trading at approximately 20.3 times the estimated earnings per share (EPS) for 2025, which is significantly higher than its competitors Carnival Corporation (LON:CCL), Norwegian Cruise Line Holdings (NYSE:NCLH), and Royal Caribbean Cruises (NYSE:RCL), with their respective multiples being 12.7x, 12.8x, and 16.5x.
With an EBITDA of $1.24 billion and a market capitalization of $20.05 billion, InvestingPro analysis indicates the stock is currently trading above its Fair Value. Subscribers can access 12 additional ProTips and comprehensive valuation metrics through InvestingPro's detailed research reports.
The price target of $49 is based on projections for the year 2026, with a forecasted target EPS of $2.90. This target EPS is substantially higher than the price target multiples set for Viking Holdings' competitors—CCL, NCLH, and RCL—whose multiples are set at 13.0x, 12.5x, and 15.0x, respectively. The analyst's valuation reflects a premium that is justified by Viking Holdings' leading position and strong performance metrics relative to its industry peers.
Investors may note that the increased price target suggests a positive outlook on Viking Holdings' financial prospects and operational performance, although the Hold rating indicates that the analyst does not necessarily see the stock as an immediate buy at its current price level.
For deeper insights into Viking Holdings' valuation and growth prospects, InvestingPro subscribers can access exclusive financial health scores and comprehensive Pro Research Reports, available for over 1,400 US stocks. The new price target takes into account the company's robust fundamentals and its strategic position within the cruise industry.
In other recent news, Viking Holdings Ltd exceeded Q3 estimates, reporting impressive financial results. The cruise operator posted adjusted earnings per share of $0.89, surpassing the consensus estimate of $0.82.
Revenue for the quarter was $1.68 billion, slightly above analyst projections of $1.67 billion. Viking's total revenue increased 11.4% YoY to $1.68 billion, a growth attributed to higher revenue per passenger cruise day.
Adjusted EBITDA also saw a rise, up 15.3% YoY to $554.3 million. The company reported an occupancy rate of 94.0% for the quarter. Looking ahead, Viking has sold 95% of its capacity for the 2024 season and 70% for the 2025 season, with advance bookings for 2025 being 26% higher than 2024 bookings at the same point last year. These are the latest developments from Viking Holdings Ltd.
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