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Chicago, Illinois-based United Airlines Holdings, Inc. (UAL) provides air transportation services. With a market cap of $17.8 billion, the company owns and manages airlines that transport people and cargo, serving customers worldwide.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and UAL perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the airline industry. UAL's extensive route network, strategic hubs, and loyalty program drive its competitive edge in global aviation, facilitating high-volume international and long-haul flights. The hub-and-spoke system boosts efficiency, while its MileagePlus program and partner agreements generate significant ancillary revenue.
UAL shares touched their 52-week high of $59.38 in the last trading session. Over the past three months, UAL stock has gained 22.4%, outperforming the Nasdaq Composite’s ($NASX) 2.2% gains during the same time frame.
In the longer term, shares of UAL rose 42.6% on a YTD basis, outperforming NASX’s YTD gains of 21.2%. However, UAL has climbed 38% over the past 52 weeks, underperforming NASX’s 39.2% returns during the same time frame.
However, UAL has been trading above its 50-day and 200-day moving averages since early September, indicating a recent bullish trend.
UAL has underperformed over the year, primarily from struggling revenues due to overcapacity related to summer flights, low pricing power, high labor and fuel costs, and potential labor expense increases from negotiations with the Teamsters union. The competitive pressure from discount carriers and concerns about an economic slowdown also impact the stock’s performance.
On Jul. 17, UAL shares closed down marginally after reporting its Q2 results. Its adjusted EPS of $4.14 surpassed Wall Street expectations of $3.97. The company’s revenue was $15 billion, falling short of Wall Street forecasts of $15.1 billion. UAL expects full-year adjusted EPS to be between $9 and $11.
UAL’s rival, Spirit Airlines, Inc. (SAVE), has had a rough ride. SAVE's shares plummeted 85% on a YTD basis and 84.9% over the past 52 weeks, trailing behind UAL.
Wall Street analysts are highly bullish on UAL’s prospects. The stock has a consensus “Strong Buy” rating from the 20 analysts covering it, and the mean price target of $69.03 suggests a potential upside of 17.3% from current price levels.
On the date of publication, Neha Panjwani 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.
