Norwegian Cruise Line (NCLH) and Viking (VIK) are expected to post modest Q2 earnings before interest, taxes, depreciation and amortization beats, supported by lower fuel costs and resilient demand, although investor focus is likely to remain on choppy European booking trends and the 2027 outlook, Morgan Stanley said in a note Thursday.
Norwegian Cruise is expected to issue a softer Q3 net yield guidance due to weaker demand for European itineraries, the investment bank said, adding that investors will likely focus on management's outlook for restoring net yield growth, managing selling and administrative expenses, and the launch of the upgraded Great Stirrup Cay private island.
For Viking, the bank expects another modest Q2 EBITDA beat on strong demand for its river and ocean cruises but said investors will focus on 2027 pricing trends as higher-priced Egypt and India itineraries normalize, as well as the company's capital allocation plans given its strong balance sheet and cash position.
Morgan Stanley maintained its equal-weight ratings on Norwegian Cruise Line and Viking, while raising its price targets to $22 from $20, and $93 from $86, respectively.
