Stifel analyst Steven M. Wieczynski reiterated a Buy rating on Lindblad Expeditions Holdings Inc. LIND, lowering the price target to $16 from $17.
The analyst notes that the demand for Lindblad Expeditions’ high-end products, such as those focused on Antarctica, Galápagos, and Alaska, continues to be strong. However, demand for some of their less popular itineraries remains mixed.
Lindblad Expeditions has been experiencing an increase in price discounting from competitors. However, the company has made it clear that they will not participate in this practice. The company believes in the quality of their products and understands that discounting prices would have long-term negative effects.
According to the analyst, Lindblad Expeditions faces certain obstacles that are hindering their EBITDA expansion. However, most of these obstacles are expected to subside as the company progresses into 2024.
The analyst has adjusted their estimates to account for the current fuel headwind, moderately lowering both the near-term and out-year earnings per share (EPS) forecasts.
For FY23, the analyst lowered the EPS estimate to $(0.69) from $(0.58).
For FY24, the analyst lowered the EPS estimate to $(0.09) from $0.02.
While Lindblad Expeditions could boost their load factors by discounting their products, the analyst believes this would have a negative impact on the company’s long-term pricing strategy.
The demand for luxury and expedition experiences remains high, and the analyst sees no signs of booking patterns slowing down in the near future.
Price Action: Lindblad Expeditions shares are trading lower by 5.50% at $7.91 on Friday.