CNBC’s Jim Cramer examined the initial public offering of viking, a cruise line whose market debut this week was the biggest of the year so far. And despite its high price tag, Cramer said he was willing to endorse the title.
“Even though Viking’s somewhat hot start has made its stock more expensive than its cruise line peers, I’m willing to pay for it because I think it will be a winner,” he said. declared.
Viking stands out from much of the competition: its ships don’t have casinos, children aren’t allowed, and it specifically targets a wealthy consumer. The company offers trips with niche destinations like Iceland or Egypt. For Cramer, this target audience gives Viking an advantage.
After trading at $24 per share, Viking began trading Wednesday at $26.15 and closed that day at $26.10. On Thursday, the stock posted more gains, closing at $26.99.
Cramer has been impressed with Viking’s margin expansion so far. Even though preliminary first-quarter results show a deceleration in growth since the pandemic, he said he believes it is “still growing well.” He admitted that Viking doesn’t have a perfect balance sheet, just like other publicly traded cruise lines.
He said he would recommend investors buy shares at that level, although he would like the price to fall to a level more in line with its peers, which he estimates to be around $20. But for Cramer, Viking deserves a premium.
“Viking has a cleaner balance sheet than its peers, a differentiated brand, it caters exclusively to a high-end clientele… a part of the business which I hope will hold up better than the mass market,” he said.
Viking did not immediately respond to request for comment.
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