BofA Cuts Norwegian and Viking Price Targets Despite Strong Demand
For Viking, BofA sees cost pressure from low water levels on the Danube and Rhine, where conditions have persisted into early fourth-quarter operations.
Stronger demand at Carnival Corporation and Norwegian Cruise Line Holdings should support net yields into the fourth quarter, BofA Securities said in a Tuesday earnings-preview note. The bank nevertheless lowered its share-price targets for Norwegian and Viking while maintaining its ratings on both companies.
BofA pointed to cruise-spending growth that accelerated to the high teens during July through September, compared with high-single-digit growth in May and June. That spending data aligns with the operators’ stronger revenue and booking performance, the bank said.
BofA reduced its Norwegian price target to $17 from $21, retaining a neutral rating, and lowered its Viking target to $105 from $115 while keeping a buy rating. It also reiterated its buy rating and $330 target on Royal Caribbean Group.
Bookings strengthen the revenue outlook
BofA said Carnival’s booking momentum accelerated through the summer, helping net yields beat the company’s third-quarter forecast and leading it to raise its fourth-quarter outlook. Net yield growth for the quarter came in at 2.4%.
The company reported fiscal third-quarter revenue of $8.44 billion, up 3.5% year over year, and adjusted earnings of $1.43 per share. Those results exceeded analysts’ expectations of $8.35 billion in revenue and adjusted earnings of $1.35 per share, according to Visible Alpha estimates.
Carnival’s customer deposits reached $7.6 billion, an increase of $500 million from a year earlier. Booked occupancy and pricing for 2027 are at record levels, while both measures for 2028 are ahead of the comparable point last year.
The company raised its fiscal 2026 adjusted earnings forecast to approximately $2.24 per share from $2.22. It expects full-year net yield growth of 3.8%, above the 3.2% analyst consensus.
Norwegian also expects third-quarter results to surpass its previous forecast because of stronger-than-anticipated revenue. Its July guidance called for adjusted earnings of $0.90 per share and adjusted EBITDA of $874 million; the company did not provide replacement figures when it signaled the improvement. It reaffirmed its full-year 2026 guidance.
Costs remain an operator-specific issue
BofA expects Royal Caribbean to exceed its third-quarter net yield guidance. The bank also forecasts a 1.5% decline in net cruise costs, placing the result at the better end of the company’s guidance range.
For Viking, BofA anticipates healthy demand but sees cost pressure from low water levels on the Danube and Rhine, which have persisted into early fourth-quarter operations. River vessels accounted for 89 of Viking’s 103 ships at December 31, 2025.
Carnival’s earnings improvement came despite a $131 million unfavorable combined impact from fuel prices and foreign exchange movements. Cruise costs per available lower berth day increased 4.2% year over year.
Carnival Corporation Chief Executive Officer Josh Weinstein cited “accelerating demand and even stronger cost discipline driving results ahead of our expectations.”
Norwegian projects full-year 2027 net interest expense of $860 million to $880 million. Royal Caribbean’s third-quarter results are due Oct. 27.
