United Airlines Set to Reveal Strong Q1 Earnings Potential
United Airlines Holdings, Inc. (UAL), headquartered in Chicago, is a leading American airline known for a range of services that includes air transportation, catering, ground handling, and maintenance. With a market capitalization of $23.4 billion, United serves customers across the Americas, Indo-Pacific, and Europe, the Middle East, and Africa (EMEA).
Upcoming Earnings Report and Predictions
The airline is scheduled to announce its Q1 earnings after market close on Tuesday, April 15. Analysts anticipate that UAL will report a non-GAAP earnings per share (EPS) of $0.85, a robust improvement compared to the negative $0.15 reported in the same quarter last year. United has a strong track record of beating earnings expectations, having exceeded analysts’ estimates in each of the last four quarters. In its previous quarter, UAL reported an adjusted EPS of $3.26, which was 8.3% above consensus estimates.
Growth Forecasts for FY2025 and FY2026
Looking ahead, United’s earnings for the full fiscal year 2025 are projected to reach $12.54, marking an 18.2% increase from $10.61 noted in fiscal 2024. Additionally, earnings are forecasted to continue climbing, with a 12.4% year-over-year increase to $14.10 per share predicted for fiscal 2026.
Stock Performance Compared to Peers
In terms of stock performance, UAL shares have experienced a 35% increase over the past year, significantly outperforming the Industrial Select Sector SPDR Fund’s (XLI) modest rise of 0.64% and the S&P 500 Index’s ($SPX) 3.6% gain during the same period.
Market Reactions to Earnings Reports
Despite surpassing expectations in previous earnings reports, UAL’s stock fell by 2.3% after the release of its Q4 2024 results on January 21. In that quarter, United achieved a record number of passengers, contributing to a commendable 7.8% year-over-year total revenue growth to $14.7 billion. A decline in fuel expenses further allowed the company to report an operating income increase of 50.6% year-over-year, reaching $1.5 billion. However, guidance provided by UAL appears to have not met all investor expectations.
Analyst Confidence and Valuation
Despite the recent stock movement, analysts maintain a positive outlook on UAL’s financial stability and future performance. Currently, the consensus recommends a “Strong Buy” rating, with 20 out of 21 analysts advocating for this stance, while only one suggests a “Hold” rating. UAL’s average price target of $125.07 implies an impressive upside potential of 107.7% from current trading levels.
On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The information provided in this article is for informational purposes only. To view the Barchart Disclosure Policy, please click here.
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