United Airlines Holdings, Inc. (UAL), based in Chicago, Illinois, provides air transportation services globally through its mainline and regional fleets, with hubs in major cities. With a market cap of $18 billion, the company also offers catering, ground handling, and maintenance services for third parties.
Shares of United Airlines have underperformed the broader market over the past 52 weeks. UAL has gained 20.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 28.9%. However, in 2024, UAL shares are up 32.8%, outperforming SPX's 11.1% gains on a YTD basis.
Zooming in further, UAL has outpaced the US Global Jets ETF's (JETS) 17.5% gains over the past 52 weeks. Moreover, UAL stock's returns on a YTD basis overshadow the exchange-traded fund’s 10.2% gains over the same time frame.
UAL’s price performance relative to the broader index in 2024 could be attributed to its soaring revenue. Its shares rose 17.5% on April 17 following a better-than-expected Q1 earnings results, despite a $200 million hit from Boeing MAX 9 grounding. The airline's steady guidance, indicating strong demand and strategic fleet adjustments, has boosted investor confidence.
For the current fiscal year, ending in December, analysts expect UAL's EPS to decline by 1.2% to $9.93 on a diluted basis. The company has consistently surpassed earnings expectations, beating the consensus estimate in each of the last four quarters.
The consensus view on the stock remains overall bullish, with a "Strong Buy" rating. Among the 19 analysts covering the stock, 13 suggest a "Strong Buy," one gives a "Moderate Buy," and five advise a "Hold."
This configuration has been consistent over the past months.
On May 13, HSBC initiated coverage on United Airlines with a “Buy” rating and a $69.20 price target, indicating a 26.3% upside potential. The rating was based on the airline's strategic customer segmentation.
The mean price target of $63.29 represents a premium of 15.5% to UAL's current levels. The Street-high price target of $98 implies a potential upside of 78.9% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
