Cruise stocks have been a surprising bright spot during a time of economic anxiety and worries about inflation.
While some consumer-facing stocks like fast-casual chains and apparel companies have been seeing sales headwinds, cruise stocks have continued to deliver solid results. Of the three major cruise stocks, Carnival (CCL 1.92%), Royal Caribbean (RCL 1.68%), and Norwegian Cruise Line (NCLH 1.96%), Norwegian has been a laggard in the post-pandemic era as it's reported weaker net yield, or price, growth, and its occupancy rates have improved at a slower rate than its peers.
Now, Goldman Sachs sees further pressure building on Norwegian. The investment bank downgraded Norwegian from buy to neutral and lowered its price target from $23 to $21, due to market saturation in the Caribbean and Norwegian's overexposure to that market. Norwegian is also investing in more growth in that region at a rate that's well above the industry's.
Image source: Viking Holdings.
The cruise stock ready to rise
On the other hand, Goldman upgraded Viking Holdings (VIK +1.74%), the cruise operator best known for its river cruises, noting its differentiated geographic exposure with limited voyages in the Caribbean.
Additionally, Viking is seeing pricing growth for 2026 cruises accelerate, and it continues to demonstrate its pricing power in the industry. Analyst Lizzie Dove also said that the company could double its EPS growth, thanks in part to future capital return programs. She raised her price target from $66 to $78.
NYSE: VIK
Key Data Points
Why Viking looks like a winner
Viking Holdings went public in May 2024, and the stock has delivered strong returns since then, nearly tripling and bucking the typical concerns about IPO stocks.
The company has differentiated itself in a crowded and competitive industry with cruises that are child-free, mostly in the European market, and tend to cater toward intellectual interests, rather than activities like gambling and shopping.
Viking ships are also upscale, and every room has a view. Those choices have helped the company distinguish itself from the larger ocean liners, and it's clearly paying off.
In its third-quarter earnings report, revenue rose 19.1% to $2 billion, and it grew its fleet to 100 ships. Demand has been strong with net yield up 7.1% in the quarter, and 70% of the 2026 capacity for its core products is already sold.
Viking's revenue growth is outpacing the big three, and the company is delivering strong profits, including an operating margin of 30% in the seasonally strong third quarter.
Even after nearly tripling from its IPO last year, Viking still trades at a reasonable price-to-earnings ratio of 31. With a differentiated business model, strong momentum, and room for growth, Viking Holdings looks like a strong bet heading into 2026.
