Viking Holdings is the IBD Stock Of The Day for Monday. Shares of the newly publicly traded parent of Viking Cruises are breaking out of a short IPO base. Viking and other cruise stocks sailed higher after Norwegian Cruise Line Holdings hiked its outlook.
Los Angeles-based Viking Holdings debuted on the New York Stock Exchange on May 1 at 24 per share. The IPO raised about $1.5 billion, making it the largest public offering since Arm Holdings launched in September, according to data from IPO research firm Renaissance Capital.
Viking was founded in 1997 and operates a fleet of nearly 100 smaller ships for luxury river, ocean and lake cruises across the globe. The company focuses primarily on Europe and the Mediterranean with niche, upscale experiences that feature art, science, history, culture and cuisine to target an older, wealthier audience.
Viking's European river vessels have an average capacity of about 190 passengers and its ocean liners hold about 930 passengers. The company's typical passenger load pales in comparison to the 3,000 load of average cruise ships.
Meanwhile, cruise demand is expected to grow from 31.5 million cruise travelers in 2023 to 35.7 million in 2024, according to Expedia Cruises.
Viking Holdings Stock
Viking shares on Monday surged 4.2% to 29.68, breaking out past an official 29.46 buy point for a new IPO base on the weekly chart, MarketSurge data shows.
However, Viking releases its Q1 results early on May 29. That will be its first report as a public company. FactSet estimates are not yet available for the report. Investors can take a position in VIK stock, but won't have a lot of time to build a cushion before earnings.
Viking stock ranks 17th in the Leisure-Services Group, according to IBD Stock Checkup. Royal Caribbean leads the IBD industry group, which ranks 108th out of the 197 groups tracked by IBD.
VIK stock's relative strength line has climbed in recent weeks. The stock has a 70 RS Rating out of a best-possible 99.
Norwegian Cruise Line Hikes Outlook
Norwegian Cruise Line Holdings hiked its outlook Monday ahead of its investor day presentation. The Miami-based cruise line announced its new "Charting the Course" strategy, which includes investment initiatives in the company culture and employees, guest product offerings, Norwegian's growth platform, as well as optimizing performance.
By the end of 2026, Norwegian expects to achieve adjusted earnings of $2.45 per share, representing a two-year compound annual growth rate of over 30% from 2024 to 2026. Norwegian plans to achieve an adjusted operational EBITDA margin of about 39% to approach historical levels.
The company by the end of 2026 also intends to reduce its greenhouse gas emissions by 10% from 2019 baseline levels.
"We have continued to see very strong demand and record bookings," CFO Mark Kempa said in the release. "We are now thrilled to launch this financial plan by setting long-term targets with increased 2024 guidance, putting ourselves on solid footing to enhance shareholder value in the coming years."
Norwegian also raised its 2024 outlook based on its 2026 targets. The company now expects adjusted earnings to surge 103% to $1.42 per share, up from its prior forecast of $1.32 per share. Norwegian guided net yield growth to rise 7.2%, compared with the prior guidance of 6.4% growth. Norwegian now sees 2024 adjusted EBITDA increasing 23.6% to $2.3 billion. The cruise line guided adjusted EBITDA of $2.25 billion with its first-quarter results on May 1. Norwegian maintained its occupancy guidance of around 105.1% capacity.
Cruise Stocks Sail Higher
NCLH stock leapt 8.3% Monday to rebound back above its 21-day exponential moving average and 10-day lines. Shares are trading just shy of their 200-day line.
Norwegian stock had fallen 14.8% in 2024.
Royal Caribbean spiked 5% Monday on the Norwegian Cruise Line announcement. RCL stock is extended above a buy zone for a cup base following a late March breakout.
Monday's move offered current investors an add-on entry as RCL cleared a few weeks of resistance.
Royal Caribbean shares have rallied 15% year to date.
Carnival jumped 7% Monday to bounce strongly above its 50-day and 200-day lines. CCL stock is off 13.7% so far this year.
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