Group 1 - Viking Holdings (VIK) reported third-quarter results that narrowly exceeded analyst expectations, positioning the stock for a potential early buy point [1] - The stock is on track for a second consecutive weekly gain, indicating a possible reversal of the downtrend that began in September [1] - The overall market saw major indexes, including the Dow, close at record highs, reflecting a positive sentiment in the investment landscape [2] Group 2 - Carnival is experiencing rising profit estimates as Wall Street anticipates more earnings growth, indicating a favorable outlook for the cruise line industry [4] - The market is currently focused on key companies such as Toll Brothers and Royal Caribbean, suggesting a broader interest in the performance of the cruise and travel sectors [4] - The S&P 500 has extended its losing streak, highlighting potential volatility in the market despite some individual stocks performing well [4]

Core Insights - Viking Holdings reported $2 billion in revenue for Q3 2025, marking a 19.1% year-over-year increase and aligning with Zacks Consensus Estimate, resulting in a surprise of +0.05% [1] - The company achieved an EPS of $1.20, up from $0.89 a year ago, with an EPS surprise of +0.84% compared to the consensus estimate of $1.19 [1] Financial Performance Metrics - Occupancy rate was 96%, exceeding the three-analyst average estimate of 94.5% [4] - Net Yield was reported at $617.00, slightly above the average estimate of $613.36 [4] - Capacity PCDs totaled 2,253,067.00 Days, compared to the estimated 2,272,497.00 Days [4] - PCDs were reported at 2,161,872.00 Days, surpassing the average estimate of 2,148,208.00 Days [4] - Onboard and other revenue reached $141.22 million, exceeding the estimated $134.85 million, representing a 24% increase year-over-year [4] - Cruise and land revenue was $1.86 billion, matching the average estimate and reflecting an 18.8% year-over-year change [4] Stock Performance - Viking's shares have returned -5% over the past month, compared to a -0.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Viking Holdings (VIK) reported quarterly earnings of $1.2 per share, exceeding the Zacks Consensus Estimate of $1.19 per share, and showing an increase from $0.89 per share a year ago, representing an earnings surprise of +0.84% [1] - The company achieved revenues of $2 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.05%, and up from $1.68 billion year-over-year [2] - Viking has outperformed the S&P 500, with shares increasing by approximately 32.3% since the beginning of the year compared to the S&P 500's gain of 12.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.54 on revenues of $1.61 billion, and for the current fiscal year, it is $2.48 on revenues of $6.38 billion [7] - The estimate revisions trend for Viking was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Leisure and Recreation Services industry, to which Viking belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another competitor in the industry, Carnival (CCL), is expected to report quarterly earnings of $0.24 per share, reflecting a year-over-year increase of +71.4%, with revenues projected at $6.36 billion, up 7.1% from the previous year [9]

Financial Data and Key Metrics Changes - In Q3 2025, net yield increased by 7.1% year-over-year, reaching $617, the highest in Viking's history [5][12] - Adjusted gross margin rose by 21.4% year-over-year [12] - Adjusted EBITDA reached $704 million, up 26.9% year-over-year, with an adjusted EBITDA margin of 52.8% [15] - Net income improved to $514 million, an increase of almost $135 million compared to Q3 2024 [15][16] Business Line Data and Key Metrics Changes - In the river segment, capacity PCDs increased by 5.2% year-over-year, with adjusted gross margin up 14.3% to $1.4 billion and net yield at $589, up 7.8% [17] - In the ocean segment, capacity PCDs increased by 15.3% year-over-year, adjusted gross margin rose by 28.5% to $1.5 billion, and net yield increased by 10.9% to $591 [17] Market Data and Key Metrics Changes - As of November 2, 2025, 96% of 2025 capacity was sold, with advanced bookings of $5.6 billion, a 21% increase from 2024 [5][21] - For 2026, 70% of capacity is already booked, with advanced bookings of $4.9 billion, 14% higher than the same point in 2025 [21][24] Company Strategy and Development Direction - The company focuses on destination and cultural enrichment, aiming to create a new category of travel that emphasizes meaningful discovery [9][10] - Viking has expanded its fleet to over 100 ships, with a commitment to modernizing river and ocean voyages [7][8] - The company aims to maintain its leadership position in river cruising by controlling or having priority access to 113 docking locations [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong booking environment and the resilience of their target customers [5][6] - The company remains committed to disciplined cost management while investing in talent and supporting expanding capacity [14][19] - Management highlighted the importance of maintaining high standards to continue receiving industry recognitions [11] Other Important Information - Viking's capital structure has improved, allowing for financial flexibility to pursue long-term growth opportunities [19][34] - The company has received a credit rating upgrade from Moody's to Ba2 [19] Q&A Session Summary Question: What is driving the pricing increase for 2026? - Management indicated that strong consumer demand and a resilient customer base are key factors driving pricing increases, with a focus on engaging consumers rather than aggressive pricing actions [30] Question: What does pursuing long-term growth mean for Viking? - Long-term growth is focused on organic growth through new ship orders and potential market share expansion in the luxury ocean segment, with an eye on scalable and margin-accretive opportunities [34] Question: Can you elaborate on demand trends and customer loyalty? - Management noted that demand remains strong, with a significant portion of customers being repeat visitors, and emphasized the brand's appeal to those seeking a quieter, more enriching travel experience [39][81] Question: How does Viking plan to respond to new competitors in the river space? - Management expressed confidence in their unique positioning and plans to continue focusing on delivering outstanding products rather than worrying about competitors [52] Question: What are the expectations for future itineraries and capacity growth? - Management indicated that while ocean itineraries will remain consistent, there is potential for geographic expansion in river offerings, particularly in emerging markets like China [87][77]

Financial Data and Key Metrics Changes - In Q3 2025, net yield increased by 7.1% year over year, reaching $617, the highest in Viking's history [5][12] - Adjusted gross margin rose by 21.4% year over year [12] - Adjusted EBITDA reached $704 million, up 26.9% year over year, with an adjusted EBITDA margin of 52.8% [15] - Net income improved to $514 million, an increase of almost $135 million compared to Q3 2024 [15][16] Business Line Data and Key Metrics Changes - In the river segment, capacity per capacity day (PCD) increased by 5.2% year over year, with adjusted gross margin rising by 14.3% to $1.4 billion [17] - Ocean segment capacity PCD increased by 15.3% year over year, with adjusted gross margin up 28.5% to $1.5 billion [17] Market Data and Key Metrics Changes - As of November 2, 2025, 96% of 2025 capacity was sold, and 70% of 2026 capacity was already booked [5][21] - Advanced bookings for 2025 reached $5.6 billion, a 21% increase compared to the same point in 2024 [21] - For 2026, advanced bookings are at $4.9 billion, 14% higher than the same point in 2025 [21] Company Strategy and Development Direction - The company focuses on destination and cultural enrichment, aiming to create a new category of travel that emphasizes meaningful discovery [9][10] - Viking plans to continue expanding its fleet and enhancing its product offerings, with a commitment to maintaining high standards of service and customer experience [11][19] - The company is exploring both organic and inorganic growth opportunities, including potential expansion into the Chinese market [76][77] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong booking environment and the resilience of their target customers [5][21] - The company remains committed to disciplined cost management while investing in talent and capacity to support long-term growth [14][19] - Management noted that the current capital structure provides financial flexibility to pursue growth opportunities [34] Other Important Information - Viking has been recognized as the number one cruise line for oceans and rivers by Condé Nast Traveler for five consecutive years [10][11] - The company controls or has priority access to 113 coveted docking locations, enhancing guest experiences [10] Q&A Session Summary Question: What is driving the pricing increase for 2026? - Management indicated that strong demand and consumer resilience are key factors driving pricing increases, with a focus on engaging consumers rather than aggressive pricing actions [30] Question: What does pursuing long-term growth mean for Viking? - Long-term growth includes organic growth through new ship orders and potential inorganic growth opportunities that are scalable and margin accretive [34] Question: Can you elaborate on demand trends and loyalty? - Management noted that demand remains strong, with a significant portion of guests being repeat customers, reflecting loyalty to the Viking brand [39][41] Question: How does Viking plan to respond to new competitors in the river space? - Management emphasized their unique advantages in docking locations and ship design, focusing on delivering outstanding products rather than worrying about competitors [52][64] Question: What are the expectations for future itineraries and market expansion? - The company plans to maintain its current successful itineraries while exploring new markets, including potential growth in the Chinese market [77][88]

Financial Data and Key Metrics Changes - In Q3 2025, Viking Holdings reported a net yield increase of 7.1% year over year, reaching $617, the highest in the company's history [4][11] - Adjusted gross margin increased by 21.4% year over year, with the highest quarterly adjusted EBITDA recorded at $704 million, up 26.9% year over year [11][13] - Net income for Q3 2025 was $514 million, an improvement of almost $135 million compared to the same period in 2024 [13][14] Business Line Data and Key Metrics Changes - In the river segment, capacity PCDs increased by 5.2% year over year, with an adjusted gross margin of $1.4 billion, up 14.3% year over year [15] - For the ocean segment, capacity PCDs increased by 15.3% year over year, with an adjusted gross margin of $1.5 billion, up 28.5% year over year [15] Market Data and Key Metrics Changes - As of November 2, 2025, 96% of Viking's 2025 capacity was sold, with advanced bookings of $5.6 billion, a 21% increase compared to the same point in 2024 [4][18] - For 2026, 70% of capacity is already booked, with advanced bookings of $4.9 billion, 14% higher than the same point in 2024 [18][22] Company Strategy and Development Direction - Viking focuses on destination and cultural enrichment, aiming to create a new category of travel that emphasizes meaningful discovery rather than traditional tourism [8][10] - The company is committed to expanding its fleet and enhancing its product offerings, with a focus on maintaining high standards of service and customer experience [10][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong booking environment and the resilience of their target customers, indicating a positive outlook for future growth [4][5] - The company remains focused on disciplined cost management while investing in talent and capacity to support long-term growth [12][17] Other Important Information - Viking has been recognized as the number one cruise line for oceans and rivers by Condé Nast Traveler for five consecutive years, reflecting strong brand loyalty and customer satisfaction [9][10] - The company has a total cash and cash equivalents of $3 billion and a net debt of $2.8 billion, with a net leverage ratio improved to 1.6 times [16] Q&A Session Summary Question: What is driving the pricing increase for 2026? - Management indicated that strong consumer demand and a resilient customer base are driving the pricing increase, with a focus on engaging consumers rather than aggressive pricing actions [26][28] Question: What does pursuing long-term growth mean for Viking? - Long-term growth is focused on organic growth through fleet expansion and potential inorganic growth opportunities that align with the brand ethos [31][32] Question: Can you elaborate on demand trends globally? - Management noted that demand remains strong, with a significant portion of bookings coming from repeat customers who appreciate the Viking experience [36][39] Question: How do you view the competitive landscape with new entrants? - Management expressed confidence in Viking's unique position and advantages, emphasizing a focus on delivering outstanding products rather than worrying about competitors [49][59] Question: What are the trends in repeat visitation and new-to-brand customers? - Approximately 53% of guests for the 2024 season had traveled with Viking before, with many guests booking additional trips while on board [74][78]

Q3 2025 Business Update - Net Yield increased by 7.1% year-over-year[10] - 2025 Advance Bookings reached 96% of Capacity PCD sold[10] - 2026 Advance Bookings reached 70% of Capacity PCD sold[10] Q3 2025 Financial Highlights - Total revenue for the three months ended September 30, 2025, was $2 billion, compared to $1.679 billion in 2024[28] - Adjusted Gross Margin for the three months ended September 30, 2025, was $1.334 billion, compared to $1.099 billion in 2024[28] - Net income for the three months ended September 30, 2025, was $514 million, compared to $380 million in 2024[28] - Adjusted EBITDA for the three months ended September 30, 2025, was $704 million, compared to $554 million in 2024[28] - Adjusted EBITDA Margin was 52.8% for the three months ended September 30, 2025, compared to 50.4% in 2024[28] Viking River and Viking Ocean Key Metrics (Nine Months Ended September 30, 2025) - Consolidated Occupancy was 95.5%[30] - Consolidated Adjusted Gross Margin was $3.184 billion[30] - Consolidated Net Yield was $598[30] Strong Cash Generation and Manageable Bond Maturities - Cash and cash equivalents as of September 30, 2025, were $3 billion[37] - Net Debt as of September 30, 2025, was $2.8 billion[37] - Net Leverage was 1.6x as of September 30, 2025[37] Business Outlook - 2025 Season Advance Bookings reached $5.6 billion, a 21% growth, with 96% Capacity PCD sold[42] - 2026 Season Advance Bookings reached $4.9 billion, a 14% growth, with 70% Capacity PCD sold[44]

Summary of Key Points from the Conference Call Industry Overview - The focus on AI investments has overshadowed other potential investment opportunities in various sectors, including semiconductors, power plants, and capital goods [1][2] - Companies not directly benefiting from AI are highlighted as compelling investment options, such as Freeport-McMoRan, which has indirect exposure to AI [1] Core Insights and Arguments - A screening of Buy-rated US stocks not included in AI/power/infrastructure ETFs identified 82 stocks with positive 3-month EPS revisions and trading below a market multiple of 26x, leading to a final list of 16 equities [2] - Savita Subramanian models an 8% return for the S&P over the next 12 months, emphasizing the importance of owning average stocks rather than the index [3] - Risks associated with AI investments include potential declines in middle-income white-collar jobs, which could impair consumer spending [3] - Hyperscalers investing heavily in AI technology may face de-rating if monetization does not meet expectations, as they currently trade at high multiples despite capital-intensive spending [3] Notable Companies and Their Performance - **Amcor PLC (AMCR)**: Recent acquisition of Berry Global is expected to enhance valuation, with EBITDA projected to approach $3.8 billion for F26 [11][12] - **AT&T Inc. (T)**: Strong performance metrics with 405k post-paid phone net additions, projecting a 9% EPS growth in 2026 [15][17] - **BGC Group**: Dominates the energy derivatives market, with expected growth in volumes due to increased power consumption driven by cloud and AI adoption [18][19] - **Church & Dwight (CHD)**: Positioned to benefit from consumer trade-down trends, with organic sales growth of 3.4% in Q3 [20][21] - **Dollar General (DG)**: Improved execution and a focus on lower price points are expected to boost sales, with a current valuation below the 5-year average [23][27] - **Freeport-McMoRan (FCX)**: Anticipates a restart of the Grasberg mine, with bullish forecasts for copper prices due to supply challenges [32][34] - **Henry Schein (HSIC)**: Transitioning to a higher-margin business model, with a target of 60% operating income from high-growth products by 2027 [38][39] - **Progressive Corp (PGR)**: Strong EPS revisions and expected dividend announcements are anticipated to drive growth [65][67] - **Walt Disney Co. (DIS)**: Growth drivers intact with expectations for double-digit growth in Entertainment operating income [80] Additional Important Insights - The market is currently cautious, providing room for multiple expansions as fundamentals improve across various sectors [14] - Regulatory improvements in Connecticut are expected to enhance Eversource's valuation [28][30] - Viking Holdings is positioned for premium valuation due to its unique brand and superior margins in the cruise industry [76][79] - The overall sentiment indicates a potential for significant investment opportunities outside the AI sector, as companies adapt to changing market dynamics and consumer behaviors [1][2][3]

Core Insights - Viking Holdings (VIK) is expected to report quarterly earnings of $1.19 per share, reflecting a 33.7% increase year-over-year, with revenues projected at $2 billion, a 19.1% increase compared to the previous year [1] - The consensus EPS estimate has remained stable over the last 30 days, indicating analysts have reassessed their initial projections [1][2] Revenue and Earnings Estimates - Analysts estimate 'Onboard and other' revenues will reach $134.85 million, marking an 18.4% increase from the year-ago quarter [4] - The 'Cruise and land' segment is forecasted to generate $1.86 billion, representing a 19.1% increase from the prior-year quarter [4] - 'Occupancy' is projected to be 94.5%, slightly up from 94.0% in the previous year [4] Key Metrics Projections - The 'Net Yield' is expected to reach $613.36, compared to $576.00 from the previous year [5] - 'Capacity PCDs' are projected to be 2,272,497 days, up from 2,030,236 days year-over-year [5] - The average prediction for 'PCDs' stands at 2,148,208 days, an increase from 1,908,364 days in the prior year [5] Stock Performance - Viking shares have seen a -1.1% change over the past month, contrasting with a +1.4% move in the Zacks S&P 500 composite [5] - With a Zacks Rank of 3 (Hold), VIK is anticipated to perform in line with the overall market in the near future [5]

Core Insights - Bank of America has identified AT&T among 16 stocks recommended for investors seeking diversification away from AI-related investments [1][8] - The selected stocks are believed to be undervalued, have seen profit estimates raised in the last three months, and are trading at least 10% below their 52-week highs [2][8] Consumer-Focused Stocks - Notable companies include AT&T, Walt Disney Co., Dollar General, and Viking Holdings, which are familiar to American consumers [4][8] - Disney is expected to benefit from its sports offerings and theme parks, while AT&T has exceeded phone subscriber estimates, indicating potential growth [5][8] Financial and Logistics Stocks - KeyCorp and Progressive are highlighted, with Progressive showing strong positive revisions in earnings per share estimates [10] - BGC Group is noted for its dominant position in energy derivatives, and J.B. Hunt Transport Services is recognized for effective cost-cutting measures [11] Industrial and Energy Stocks - Analysts have identified natural gas and energy stocks like Eversource Energy and Oneok, along with Freeport-McMoRan, which is expected to recover from recent operational issues [12] - Industrial firms such as Amcor are considered undervalued following recent acquisitions and leadership changes [13]