Key insights
- Morgan Stanley downgraded Viking Holdings to Equalweight, citing valuation concerns after a significant multiple re-rating. While raising the price target to $86, they anticipate increased marketing spend and adjusted EBITDA and EPS estimates downward for the coming years. The firm sees a balanced risk-reward profile, with limited upside to the revised price target, suggesting the shares are fairly valued. The downgrade may create slight negative sentiment for the stock.
Investing.com - Morgan Stanley downgraded Viking Holdings (NYSE:VIK) to Equalweight from Overweight on Friday, raising its price target to $86 from $81.
The firm adjusted its estimates to reflect increased marketing spend expected in 2026 and raised its net yield forecast to approximately 5.5% from 4% in 2027 based on the strength in Viking’s booking update. Morgan Stanley also increased its buyback assumption to approximately $2.5 billion annually starting in 2027, representing about 6.5% of current market capitalization, up from $2 billion previously.
The firm’s fiscal 2026, 2027 and 2028 EBITDA estimates moved down 3%, remained flat and rose 2% respectively, while earnings per share estimates declined 7%, 4% and 1% for the same periods. The estimates now reflect an average free cash flow yield of approximately 4% through 2028.
Morgan Stanley said the stock has benefited from a significant multiple re-rating since the beginning of last year, moving from approximately 13 times to 18 times consensus next-twelve-months EBITDA and from 19 times to 24 times consensus next-twelve-months price-to-earnings. The firm said this creates a more balanced risk-reward profile.For investors seeking deeper insights into Viking Holdings’ valuation and growth prospects, the company is among the 1,400+ US equities covered by comprehensive InvestingPro Pro Research Reports, which transform complex Wall Street data into clear, actionable intelligence through intuitive visuals and expert analysis.
The firm expects positive revisions as 11% pricing for 2027 should support yields well above consensus at approximately 4.5%, though Morgan Stanley’s own forecast stands at approximately 6%. With approximately 1% downside to the revised $86 price target, the firm views the shares as fairly valued.
In other recent news, Viking Holdings reported a significant earnings surprise for the first quarter of fiscal 2026. The company posted an earnings per share (EPS) of -$0.11, outperforming the forecasted -$0.34. This represents a 67.65% positive surprise. Additionally, Viking Holdings experienced a 17.5% increase in revenue year-over-year, reaching $1.008 billion. Mizuho responded to these results by raising its price target for Viking Holdings stock to $75 from $69, although it maintained an Underperform rating. The firm highlighted stronger-than-expected net yields in both the River and Ocean segments as key contributors to these results. River reported net yields of 28.3%, significantly surpassing both Mizuho’s and the Street’s estimates. Ocean’s net yields also exceeded expectations, with a reported 5.6%. These recent developments reflect Viking Holdings’ robust performance in the first quarter of 2026.
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