- Giugno 8, 2022
- Posted by: Oliver
- Categoria: Economics, Finance & accounting
United Airlines provides transportation of passengers as well as cargo. So, it benefits from both solid demand for shipping and a resurgence in travel activities, as travel opens after the pandemic.
In the first quarter of 2022, the carrier made strong Q2 guidance, saying that it expects the “highest quarterly revenue in our history in 2Q.” Moreover, despite reporting an adjusted loss per share in Q1, United Airlines claims to be on track to return to profitability in Q2.
The most concerning point is probably its declining capacity. The carrier expects its Q2 capacity to be off 14% from 2019 levels, a larger decline from its previous guidance of a 13% drop. Nonetheless, the upbeat guidance on both the top and bottom line is keeping investors and most analysts upbeat.
In an interview with CNBC in April, Becker reiterated that international travel is set to experience increased activities, and United Airlines is well-positioned to benefit from it. Three years of pent-up demand is expected to fuel this trend.
In April, Becker maintained her bullish stance on United Airlines with a Buy rating while raising the price target to $86.50 from $78. Apart from increased business and leisure travel, the analyst also looks at a strong summer for transatlantic travel, considering the addition of several leisure destinations by UAL around the transatlantic region.
Looking at the historical 77% success rate on her UAL ratings, Becker’s conviction on the stock can be trusted. Moreover, each of her ratings has generated a 22.2% profit on average.
Wall Street seems to be cautiously optimistic about UAL, with a Moderate Buy consensus rating based on 10 Buys, seven Holds, and one Sell. The average price target for United Airlines is $59.85, implying 35.2% upside potential.