United Continental (UAL)
by Zacks Equity ResearchOctober 22, 2012 | Comments : 0 Recommended this article: (0)
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Despite the company's aggressive actions to improve profitability, we believe surging fuel prices and the threat of recession in Europe pose downside risks to the stock. Additionally, high non-fuel costs related to fleet optimization and product initiatives, high unionization, new regulations related to advertising, competitive threats and risks pertaining to the successful Continental integration could hurt the company's profitability going forward.
Thus, we have an Underperform rating with the target price of $18, based on 8x our earnings estimate for 2012. The stock is trading at a discount to the peer group as well as the S&P 500 benchmark, based on the forward earnings estimate.
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