Loop Capital sets Viking stock Buy rating, PT at $55

On Tuesday, Loop Capital initiated coverage on Viking Holdings (NYSE:VIK), awarding the cruise line operator with a Buy rating and a price target (PT) of $55.00. The firm’s analysts expressed confidence in Viking’s growth prospects and less leveraged balance sheet compared to its industry peers. For deeper insights into cruise line operators and their valuations, InvestingPro offers comprehensive analysis through its Pro Research Reports, covering over 1,400 US stocks with expert insights and actionable intelligence.

Loop Capital’s coverage of the cruise industry included Hold ratings for Carnival Corporation (NYSE:CCL), Norwegian Cruise Line Holdings (NYSE:NCLH), and Royal Caribbean Cruises (NYSE:RCL). The price targets set for these companies—$25 for CCL, $26 for NCLH, and $250 for RCL—align closely with their current trading prices, indicating a belief that their stock values have fully incorporated the expected demand recovery and balance sheet improvements. NCLH, with a market capitalization of $12.28 billion, has demonstrated strong revenue growth of 15.76% over the last twelve months, though InvestingPro analysis indicates the stock is currently trading above its Fair Value.

The analysts’ optimism for Viking Holdings is driven by the company’s higher expected growth rate and its more manageable debt levels. According to Loop Capital, Viking’s smaller size as a public cruise line and its significant operations in river cruising, along with its newer ocean ships, position it for better growth opportunities. In contrast, NCLH’s debt-to-equity ratio stands at 12.41, with InvestingPro data revealing that short-term obligations exceed liquid assets, highlighting the importance of debt management in the sector.

Viking’s recent initial public offering (IPO) is seen as a positive indicator of the company’s focus on profitability. Loop Capital suggests that Viking has several options to enhance its financial performance. The analysts are taking a cautious approach to the broader cruise industry, opting to wait for more companies to provide their 2025 guidance before making further assessments.

The $55 price target for Viking Holdings represents a 10% near-term upside, implying that the analysts see potential for the stock to rise in value shortly. Loop Capital’s evaluation is based on discounted Net Operating Profit After Tax (NOPAT) models, which help determine a company’s potential value by assessing its profitability after accounting for the cost of capital.

In other recent news, Loop Capital Markets has set a price target of $250 for Royal Caribbean Cruises with a Hold rating, while Macquarie analysts maintain a positive outlook on Norwegian Cruise Line Holdings Ltd ., citing robust consumer demand and a strengthened financial position. Stifel analysts have increased the price target for Norwegian Cruise Line Holdings shares to $35, maintaining a Buy rating on the stock. The company has also announced a reshuffling of its executive team, naming Jason Montague as the new Chief Luxury Officer, overseeing Oceania Cruises and Regent Seven Seas Cruises, effective February 17, 2025. Norwegian Cruise Line Holdings Ltd. has also settled its outstanding borrowings under several credit facilities and announced executive shifts, according to a recent 8-K filing with the U.S. Securities and Exchange Commission. These are all recent developments that investors should take into account.

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