Investing.com -- Bernstein initiated coverage of Viking Holdings with an Outperform rating and a $120 price target, while starting Norwegian Cruise Line Holdings at Market-Perform with an $18 target in a note on Wednesday, as analyst Richard Clarke rounded out the firm's cruise sector coverage.

Viking is Bernstein's top cruise pick. Clarke cited the company's position as the only pure-play luxury travel stock, a 24% EPS CAGR at 46% return on invested capital, and strong forward booking visibility as key attractions.

"2026 is already sold, 2027 is nearly half sold — it's the kind of order book that would make a luxury goods business jealous," Clarke wrote.

Despite broad sell-side support, Bernstein argued the stock's valuation has not kept pace with its outlook, trading below 20x 2027 price-to-earnings for 25% EPS growth.

Norwegian is a contrasting picture. Clarke acknowledged structural weaknesses and persistently high leverage of approximately 6x, though noted the stock's recent selloff, stabilizing itineraries and the upcoming launch of its Great Tides water park as factors limiting further downside.

"At this stage, we would sell any unwarranted optimism," Clarke wrote.

Bernstein reiterated a broadly constructive view on the cruise industry, pointing to broadening demand outpacing constrained supply and ongoing product innovation driving pricing power.

The firm noted that the sector is slow to change direction. "The cruise industry, much like the ships, is slow to turnaround. This means in the near term the winners tend to keep winning and self-help stories take years," Clarke added.