Stifel cuts Viking Holdings stock price target on river concerns

Stifel has reduced its price target for Viking Holdings shares (NYSE:VIK) to $115 from $120, while retaining a Buy rating. The stock is currently valued at $80.30, indicating potential upside from the new target. The firm recently allowed Viking Holdings management to showcase their company through a virtual tour and overview. Low water levels in European rivers have been a persistent concern since mid-summer.

Stifel believes that the current trading levels have accounted for the potential impact from these water level issues. This sentiment aligns with broader caution among analysts, as 4 analysts have revised earnings downward for the upcoming period. Even though the stock is trading at a P/E ratio of 26.67, its PEG ratio of 0.41 suggests it may be undervalued considering its growth potential.

Viking Holdings remains confident in its 2027 net yield goal of mid-single digit growth, as per feedback from agent sources. Analysts anticipate ocean yields to increase in the high-single digits and river yields to rise in the low-single digits, taking into account FCC headwinds. The company has also announced a $1 billion share repurchase program authorized by the board of directors to return capital to shareholders while investing in the fleet and guest experience.

JPMorgan lowered its price target to $131, maintaining an Overweight rating, while UBS kept its Buy rating and raised its target to $121. Mizuho raised its price target to $82, still holding an Underperform rating, citing Viking Holdings' quality outlook. Stifel's revised target of $120 also recognizes low water levels as a temporary challenge.

These updates provide investors with insights into Viking Holdings' strategic decisions and the varying analyst perspectives on the stock's performance.