Jeffries has shifted to a more bullish stance on the Vikings. The bank upgraded Cruise stock from hold to buy. The company also raised its price target to $80 from $60, implying a 16% upside from Friday’s closing price. Analyst David Katz said: “We are driving the stock up on continued strong growth in revenue, adjusted EBITDA, and adjusted EPS, along with coverage-leading (>100%) FCF conversion.” VIK YTD Mountain VIK YTD Charts Katz praised Viking’s industry-leading pricing and its “lucrative position in the luxury segment” thanks to the company’s “resilient high-income consumers.” He also pointed out that the company has been able to expand profit margins while maintaining reasonable unit prices. The company’s limited exposure to the Caribbean also boosts the stock price. This means Viking can benefit from capacity cuts in Europe while avoiding potential headwinds from Norwegian Cruise Line’s move there. “We believe VIK’s performance should enable a capital return of at least $500 million through YE27 with a leverage profile of less than 1.0x, providing management with sufficient resources should M&A opportunities arise,” he said. The analyst added that Viking is likely to continue improving its cost efficiencies. The company expects profit margins to expand as it achieves efficiency in scale. Katz’s upgrade follows a similar upgrade by Goldman Sachs last week. Goldman analyst Lizzy Dove similarly cited Viking’s “differentiated geographic exposure and high-income demographic” as tailwinds. Viking stock is up 56% this year. Shares rose more than 1% earlier in the day following Jefferies’ rating upgrade.
