Barclays analyst Brandt Montour released a report on Tuesday stating that Viking Holdings (VIK.US) has a rare value in the luxury river cruise market targeted at the affluent baby boomer generation. Barclays Bank gives the stock a 'shareholding' rating with a target price of $39.

Montour said, 'We expect Viking Holdings' revenue and EBITDA growth to be higher than the industry average in the coming years, mainly due to the large-scale production capacity growth, and higher-than-industry growth in return on investment, which benefits from strong brand awareness and longer booking lead times.'

Demand for luxury cruises is expected to grow as the wealth of the baby boomer generation in the United States increases, currently representing 73% of the country's wealth.

Viking Holdings' passengers typically book cruises 11 months in advance. This longer lead time, combined with strong brand awareness and high Net Promoter Score (NPS), means more stable pricing and higher returns on investment. Barclays predicts annual growth rates of 5.9% and 3.9% in 2024 and 2025, respectively, higher than the current market expectations of 5.7% and 3.4%.

Compared to the ocean cruise market, the river cruise market is much smaller and underserved, and Viking Holdings quickly took advantage of this niche. Through this process, Viking Holdings has become synonymous with the luxury river cruise market.

Although the ocean cruise market is larger and more competitive, Viking Holdings competes more directly with luxury brands under large companies such as Norwegian Cruise (NCLH.US), Carnival Cruise (CCL.US), and Royal Caribbean Cruise (RCL.US). Viking Holdings is actively expanding in this area and is expected to account for 40-50% of luxury maritime industry capacity growth in 2025 and 2026.

As of Tuesday's close, Viking Holdings was up 0.72% to $33.50. The stock was listed on the NYSE on May 1, and has since risen by 40%.