Viking (VIK) is well positioned to handle the challenge of low river water levels due to its fleet of over 90 river ships, enabling it to plan for itineraries that allow swaps, which its smaller competitors cannot do, UBS said in a Wednesday note.

The company is issuing future cruise credits to disrupted current bookings, which will be counted as discounts to cruises in 2027 and 2028 when the vouchers are used, while cancellations will impact Q3 yields, UBS analysts said. The analysts noted that Viking has not cancelled any cruises, using ship swaps instead.

The analysts estimated the impact of future cruise vouchers on 2027 and 2028 net yields to be less than 1% for each year, since the vouchers would be distributed over the two years and across the entire fleet, which is projected to grow 15% in 2027 and 10% in 2028.

Further, about half of the company's fleet is allotted for ocean cruising and is not affected by the low river water levels, the analysts said.

UBS' rating on the company's stock is buy with a price target of $121.

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