Viking gains after wave of bullish Wall Street coverage initiations

By Granth Vanaik

(Reuters) - Several Wall Street brokerages, including J.P. Morgan and UBS, have started coverage on Viking Holdings, with a bullish view on the travel and cruise company's growth opportunities in an expanding global vacations market.

Viking shares rose about 1% to $29.93 on Tuesday and were up more than 13% since their first day of trading on May 1.

WHY IS IT IMPORTANT?

Underwriters of an initial public offering have to wait for a specific period by industry practice before starting coverage on the company's stock.

Viking had gone public with Bank of America, J.P. Morgan Chase, UBS Investment Bank, Wells Fargo, HSBC and Morgan Stanley as the lead underwriters of the offering.

CONTEXT

Cruise operators are expected to see a record 2024 as travelers continue to opt for sea-based experiences over expensive land-based vacations.

Norwegian Cruise Line Holdings also raised its annual profit forecast last week for a second time.

Shares of Norwegian and Carnival are down more than 17% each this year after growing 63.7% and 130%, respectively, in 2023, while those of rival Royal Caribbean Group are up 14% for the year.

WHAT DOES THE STREET SAY?

J.P. Morgan ("overweight", PT: $34) says Viking is well-positioned to gain multi-year market share within the expanding $1.90 trillion global vacation market.

Bank of America ("buy", PT: $35) notes Viking enjoys a well-recognized brand and high customer satisfaction that present a competitive advantage in an otherwise highly fragmented industry.

Wells Fargo ("overweight", PT: $35) says the company's 11-month average booking window provides "superior demand visibility, which allows it to better manage supply and demand than cruise peers that have shorter, 6-8 month booking windows."

(Reporting by Granth Vanaik in Bengaluru; Editing by Shreya Biswas)