Tag Archives: financial

Jefferies Raises Viking Price Target, Keeps Hold on Norwegian

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Jefferies Raises Viking Price Target, Keeps Hold on Norwegian

Viking Vela, photo credit Spacejunkie2 – https://flic.kr/ps/GkiQt

Jefferies analyst David Katz updated his outlook on two major cruise operators this week following their fourth quarter and year end 2025 earnings, lifting his price target on Viking while maintaining a cautious stance on Norwegian Cruise Line Holdings.

Viking Impresses

In a note sent to investors, Katz raised his price target on Viking $91 from $80, reiterating a buy rating, after the company posted its fourth quarter and full year results.

Occupancy of 95.0%, against Katz’s 92.7% projection, led the outperformance, driven by particularly strong ocean segment results where occupancy improved 330 basis points year-over-year. Net yields rose 11.0% in the quarter, roughly double analyst expectations.

Looking ahead, Viking said fiscal 2026 is now 86% booked, up from more than 70% as of the third quarter.

“The clarity of growth is also critical support for the increasing valuation multiples we apply,” Katz wrote, adding that he expects Viking to “continue to outperform peers within cruise and across our coverage, largely irrespective of valuation levels.”

Katz also noted that Viking’s river operations are effectively fully fuel-hedged through forward purchase agreements, and that its only itineraries near the Iran conflict, a small percentage of 2026 capacity in Egypt, have not prompted guest concerns.

Norwegian: Hold, $20 Target

Katz was less upbeat on Norwegian Cruise Line Holdings reiterating a hold rating and maintaining his $20 price target.

Management said Norwegian is running slightly behind its optimal booking curve for 2026, he said, and plans to prioritize occupancy recovery, a strategy Katz acknowledged as “a necessary strategic move” but one that “likely comes with lower pricing in the near term.”

On the cost side, Katz said SG&A reductions are now the target for savings, with ship costs already reduced meaningfully. He expects those efforts to gain traction in the second half of 2026 and into 2027.

“Given guidance for leverage greater than 5.0x through YE26, we remain conservative on the shares,” he wrote.

Royal Caribbean Increases Financial Guidance for 2024

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Independence and Symphony of the Seas in San Juan, Puerto Rico photo credit Spacejunkie2 Flickr

Royal Caribbean Group today provided an update on demand and updated its 2024 guidance.

The company said it continues to be very encouraged about the demand and pricing environment for 2024.

Since its most recent update on its Q4 2023 earnings call, the WAVE booking season has exceeded the company’s initial expectations, with the first five weeks of the year resulting in the best WAVE booking weeks in the company’s history.

“Bookings have been significantly higher than during the same period last year, with the back half of the year up by more than the front half. For 2024, all four quarters and all key products are booked ahead of the same time last year in both rate and volume. Consumer spending for onboard purchases continue to exceed prior years driven by greater participation at higher prices, indicating quality and healthy future demand,” the company said in a statement.

“Since our last earnings call, robust demand for our vacation experiences has significantly exceeded our initial expectations,” said Jason Liberty, president and CEO of Royal Caribbean. “As a result, we are increasing our 2024 guidance on stronger revenue outlook, and we expect to achieve all Trifecta goals in 2024. Trifecta marks an important milestone as we remain intensely focused on delivering a lifetime of vacations and priceless memories for our guests while delivering exceptional long-term shareholder value.”

As a result of the strong WAVE season, the company is increasing its 2024 Adjusted EPS guidance by $0.40 compared to its February guidance. For the full year, Adjusted EPS is now expected to be $9.90 to $10.10 driven by an increase in constant currency net yield growth of approximately 100 bps compared to the February guidance. Approximately $0.15 of the full year increase in adjusted EPS is driven by an improved revenue outlook for the first quarter of 2024. The company now expects to achieve all Trifecta goals in 2024.

Royal Caribbean Business Update Call Preview: What Matters

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Royal Caribbean Group has scheduled a business update call for investors, as well as report 2020 fourth quarter and 2020 full-year earnings, on Monday, Feb. 22.

It’s a key call for the investment community, with the company approaching the one-year mark without ships in service from U.S. ports, and only a small percentage of its fleet operating, with the Quantum of the Seas sailing from Singapore while TUI Cruises and Hapag-Lloyd Cruises have seen smaller restarts.

Company executives are expected to provide a 15 to 25-minute presentation and then will open it up to question from financial analysts. 

What to Listen For:

  • Restart: When will ships actually start sailing in mass in the United States and Europe? Company executives will be pressed to answer or provide a realistic timeline. Previous remarks about restarting in 2020 did not pan out. 
  • CDC: Will company executives provide an update regarding ongoing discussions with the CDC and its Conditional Sailing Order. Since being issued in late October there have been no further public updates nor promised technical regulations. 
  • Biden Administration: After the industry had high-profile meetings with Vice President Mike Pence in 2020, as well as a teleconference in October, what has been the relationship with the new U.S. administration so far with President Joe Biden in office?
  • Azamara: Company executives will need to comment on the sale of Azamara to a private equity company. Will other sales of ships or brands follow?
  • Alaska: How will the Canada cruise ship ban impact the Alaska season and is the idea of a waiver to operate without calling on a foreign port realistic?
  • Occupancy: When the ships do restart, what occupancy will they sail at, and what occupancy do they need to sail at to generate positive earnings?
  • Deployment: Could 2021 and possibly 2022 lead to a seismic shift in deployment as cruise lines stay even closer to home and embrace short cruises?
  • Cash Burn: Royal Caribbean Group opted not to provide an exact cash burn figure in its last earnings release, but offered a range that averaged out to $270 million a month. Investors will be looking for an update.
  • Startup Costs: Among Wall Streets, key concerns will be the startup costs per vessel as well as the timeline to get a vessel ready to cruise with guests.
  • Lay Up: Will the company elaborate on further cold lay-up scenarios for the vessels that may return to service last?