Why the Market Dipped But United Airlines (UAL) Gained Today

Zacks
08 Apr

United Airlines (UAL) closed at $58.77 in the latest trading session, marking a +1.91% move from the prior day. This move outpaced the S&P 500's daily loss of 0.23%. At the same time, the Dow lost 0.91%, and the tech-heavy Nasdaq gained 0.1%.

The airline's shares have seen a decrease of 30.42% over the last month, not keeping up with the Transportation sector's loss of 24.11% and the S&P 500's loss of 12.13%.

Analysts and investors alike will be keeping a close eye on the performance of United Airlines in its upcoming earnings disclosure. The company's earnings report is set to go public on April 15, 2025. The company's earnings per share (EPS) are projected to be $0.80, reflecting a 633.33% increase from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $13.49 billion, reflecting a 7.59% rise from the equivalent quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $12.20 per share and a revenue of $60.67 billion, indicating changes of +14.99% and +6.32%, respectively, from the former year.

Any recent changes to analyst estimates for United Airlines should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 5.83% lower within the past month. Right now, United Airlines possesses a Zacks Rank of #3 (Hold).

Looking at valuation, United Airlines is presently trading at a Forward P/E ratio of 4.73. This valuation marks a discount compared to its industry's average Forward P/E of 6.7.

One should further note that UAL currently holds a PEG ratio of 0.43. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Transportation - Airline industry had an average PEG ratio of 0.51 as trading concluded yesterday.

The Transportation - Airline industry is part of the Transportation sector. This industry, currently bearing a Zacks Industry Rank of 156, finds itself in the bottom 38% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

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