Street Calls of the Week
Investing.com - Mizuho initiated coverage on Viking Holdings (NYSE:VIK), currently trading at $59.22 with a market capitalization of $26.26 billion, with an Underperform rating and set a price target of $54.00. According to InvestingPro data, the stock has shown remarkable strength with a 56.5% return over the past year.
The research firm acknowledged Viking as a "very high-quality business" with a unique business model and strong management team, but indicated these positive attributes are already reflected in the current stock price.
Mizuho outlined three key concerns in its analysis: potential impact from new competition with Celebrity entering the river cruise market in 2027, inherent capacity constraints in the river cruise segment, and stretched valuation relative to the broader cruise industry.
The firm noted that unlike ocean cruises where companies can add private islands as destinations, river cruises cannot easily add new cultural destinations along established waterways.
At 14.5 times 2026 estimated EBITDA and less than 4% free cash flow yield, Mizuho believes Viking Holdings presents unfavorable risk/reward dynamics and sees "better relative value elsewhere" in the sector.
In other recent news, Viking Holdings has announced a $1.7 billion private offering of senior notes through its subsidiary, Viking Cruises Ltd. These notes, due in 2033 with an interest rate of 5.875%, are intended to refinance existing debt, including redeeming all outstanding notes due in 2027 and refinancing finance leases for several ships. UBS has reiterated its Buy rating for Viking Holdings, with a price target of $69, citing improved booking revenue metrics for 2026. Viking’s revenue per passenger cruise day for 2026 has increased by 5% year-over-year, according to UBS. Meanwhile, Truist Securities has raised its price target for Viking Holdings to $59, highlighting the company’s resilience in the luxury market with bookings per cabin day for 2026 up by 4% compared to last year. Stifel has also maintained its Buy rating with a $75 price target, noting that Viking’s pricing for 2026 remains strong since its IPO in May 2024. These developments reflect Viking’s ongoing efforts to strengthen its financial position and capitalize on the luxury cruise market’s demand.
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