United Airlines: Still Ready For Takeoff

 

• United Airlines is poised to ride the trends for higher passenger traffic to larger profits.
• The stock is priced for another virus shutdown while even analysts that missed the recent demand rebound predict a $7+ EPS in 2023.
• United should double by 2025 on just reaching half their pre-tax margin target.
• This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More » 

While the market fluctuates on travel stocks due to soaring fuel prices and recession fears, United Airlines Holdings (NASDAQ:UAL) still appears poised for substantial profit growth in the years ahead. The airlines are again in the news for cutting flights due to staffing shortages during the peak summer flying months. Regardless, my investment thesis remains ultra Bullish on the stock following the big dip despite the ongoing logic that traffic demand is set to ultimately top 2019 levels along with historical trends.

Read the full article at Seeking Alpha. 

Disclosure: Long UAL. Please read the disclaimer page for more details. 

Update - July 25

These analysts are absurd. $UAL is on a path to $100+, but analysts are cutting price targets due to some potential short term headwinds. These analyst hits are just head shaking.

-Equity analyst Christopher Stathoulopoulos advised that the consensus estimates after earnings remain stubbornly elevated and set the stock up to disappoint in 2022. As such, he indicated a move to a “Neutral” rating from a previous Buy-equivalent was in order.

-“When unpacking UAL’s “repackaged” FY23 pretax margin guide, we believe that the operating headwinds outlined by UAL could get worse before they get better, with the potential for an economic slowdown into 2023 putting additional pressure on what we believe is an unrealistic FY23 ASM guide,” he told clients. “While we continue to rank CEO Scott Kirby at the top of our coverage in terms of execution and do see United Next as a viable strategy into mid-decade, against an increasingly fragile operating backdrop, we see better risk-reward in peer [Delta Air Lines] (DAL).”

-Stathoulopoulos cut his price target from $43 to $35 alongside the downgrade. Shares of the Chicago-based air carrier fell 2.27% shortly after the market open.