With Covid-19 disruptions in the rearview mirror and the cruise industry back on track, another cruise company has taken a step closer to possibly going public. Viking Holdings said last week that it has filed a draft registration statement with the U.S. Securities and Exchange Commission relating to a proposed initial public offering. The move comes at a time when the IPO market is expected to reopen after crashing in 2022 due to Federal Reserve rate hikes. Melius Research believes a Viking IPO makes rational sense. “The cruise industry is making great strides, with demand recovering and accelerating, but there is further upside as costs moderate and balance sheets improve,” analyst Conor wrote in a note Wednesday Cunningham. Cruise lines were the last in the travel industry to recover from the Covid pandemic. Norwegian Cruise Line, whose recovery has lagged rivals, reported its first profitable year since 2019 on Tuesday. While shares of Norwegian, Royal Caribbean and Carnival are all down this year, they have taken a hit in 2023. Royal Caribbean rose nearly 162% last year, while Carnival rallied 130% and Norwegian gained about 64%. Despite concern about a spike in demand, the data doesn’t support a slowdown, Cunningham said. “What the industry really needs is new eyes from investors and a potential incremental buyer. A Viking IPO could bring both,” he said. The analyst has buy ratings on Royal Caribbean, Carnival and Norwegian. He expects Norwegian to rise 12% over the next year, based on his $21 price target. As for Carnival and Royal Caribbean, the analyst expects an increase of more than 25% from Tuesday’s close. He has a $20 price target on Carnival and a $155 forecast on Royal Caribbean. This is also the latest sign that the IPO market could make a comeback. In 2023 and 2022 combined, just 92 companies went public, well below the 311 seen in 2021. There have already been more than 30 initial public offerings year to date.