Viking Holdings is the IBD Stock of the Day as shares trade in a buy zone and cruise travelers remain buoyant.
Viking, which caters to the luxury stratus of the cruise market, has been turning itself around from a loss in 2023. The company returned to profitability in 2024 and analysts expect earnings this year of $2.54 a share, up 37% from the $1.86 it earned last year.
Analysts polled by FactSet expect sales to climb 13% to $7.16 billion this year.
With a fleet of about 100 smaller ships, the company specializes in river, ocean and lake cruises across Europe.
Cruise Travel Remains Strong
A UBS analyst wrote in a note to clients this week that channel checks are positive for cruise lines. A major cruise seller saw booking volume increase 6% in April, 9% in May and 9% in the first half of June. The average price rose 6% in April, 7% in May and 7% so far in June, analyst Robin Farley said in her report.
Europe, Asia, Alaska and long Caribbean trips are all performing well, and the unnamed booker is not seeing much of last-minute sales promotions.
In a positive for Viking, luxury prices are very good for the summer, Farley noted. "Luxury in general is selling well," she added. "No one is asking for help on the luxury side."
As for Viking specifically, some price increases eased, though that was expected: The company is filling the last few cabins for 2025 that are likely offseason and lower-priced cabins. The booking firm sees no problems with Viking, the research note added. Farley has a buy rating on Viking with a 55 price target.
An important checkpoint for the cruise industry comes Tuesday, when Carnival will announce earnings for the May-ended quarter. It will be the first cruise-industry report since the Israel-Iran conflict broke out, and investors will be looking for details on any impacts on bookings.
The price of crude oil is up about 10% in the past week, and that could impact cruise-line margins.
Carnival stock is also in a buy zone after clearing a 23.46 handle entry on May 27.
Viking Stock Near Buy Point
Viking stock topped the 48.58 buy point of a cup-with-handle base on June 6, according to IBD MarketSurge pattern recognition. Shares then dipped, but on Friday were back above the entry. The buy range goes to 51.
Viking's base was deeper than normal, with a 40% total decline and a 13% drop in the handle area. Still, institutional investors appear to be getting back into the stock: The Accumulation/Distribution Rating is B-, and the up-down volume ratio is a bullish 1.6.
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Viking stock has a 21-day average true range (ATR) of 2.92%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves.
With the S&P 500 and Nasdaq now in a power trend, investors can buy stocks with ATRs up to 8%, though they should be wary of being too concentrated in high-octane names.
Viking stock, which went public May 1, 2024, at $24 per share, has a Composite Rating of 88.
