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6 Reasons Why Investors Should Buy United Airlines (UAL)
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United Airlines Holdings, Inc. (UAL - Free Report) is benefiting from a steady recovery in domestic and leisure air-travel demand. Owing to buoyant air-travel demand, United Airlines anticipates total revenue per available seat mile (TRASM) to increase 24-25% in the December-end quarter from fourth-quarter 2019 actuals.
Against this backdrop, let’s look at the factors that make this stock an attractive pick.
What Makes United Airlines an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse so far this year. Shares of United Airlines have gained 19.6% over the past six months, outperforming 7.1% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: United Airlines currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company seems to be an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions:The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the past 60 days, the Zacks Consensus Estimate for United Airlines’ fourth-quarter 2022 earnings has moved up more than 100% year over year. For 2022, the company’s earnings are expected to increase more than 100% year over year.
Positive Earnings Surprise History: United Airlines has an impressive earnings surprise history. The company delivered an earnings surprise of 7.77% in the last four quarters, on average.
Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For fourth-quarter 2022, United Airlines’ earnings are expected to register more than 100% growth. For 2022 and 2023, the company’s earnings are expected to grow more than 100% year over year, each.
Growth Factors: United Airlines is seeing a steady recovery in domestic and leisure air-travel demand. On the back of upbeat air-travel demand, UAL was profitable in the third quarter of 2022. The third quarter was the second consecutive profitable quarter for UAL since the onset of the pandemic.
Management also believes that air-travel demand and pricing trends will remain strong in the December-end quarter. UAL expects the adjusted operating margin in the December-end quarter to be 10%, rising above the 2019 levels (pre-coronavirus) for the first time. Driven by solid demand, management expects TRASM to increase 24-25% in the December-end quarter from fourth-quarter 2019 actuals. UAL expects fourth-quarter earnings per share of $2-$2.25. UAL is on track to achieve a pre-tax margin of 9% in 2023.
Other Stocks to Consider
Some other top-ranked stocks from the broader Zacks Transportation sector are Ryder Systems ((R - Free Report) )and Teekay Tankers Ltd. ((TNK - Free Report) ),each currently carrying a Zacks Rank #2.
Ryder has an expected earnings growth rate of 67.12% for the current year. R delivered a trailing four-quarter earnings surprise of 30.13%, on average.
The Zacks Consensus Estimate for R’s current-year earnings has improved 6.9% over the past 90 days. Shares of R have gained 1.1% over the past year.
Teekay Tankers has an expected earnings growth rate of 236.67% for the current year. TNK delivered a trailing four-quarter earnings surprise of 42.23%, on average. Teekay Tankers has a long-term expected growth rate of 3%.
The Zacks Consensus Estimate for TNK’s current-year earnings has improved 87.5% over the past 90 days. Shares of TNK have soared 167.9% over the past year.
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6 Reasons Why Investors Should Buy United Airlines (UAL)
United Airlines Holdings, Inc. (UAL - Free Report) is benefiting from a steady recovery in domestic and leisure air-travel demand. Owing to buoyant air-travel demand, United Airlines anticipates total revenue per available seat mile (TRASM) to increase 24-25% in the December-end quarter from fourth-quarter 2019 actuals.
Against this backdrop, let’s look at the factors that make this stock an attractive pick.
What Makes United Airlines an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse so far this year. Shares of United Airlines have gained 19.6% over the past six months, outperforming 7.1% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: United Airlines currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company seems to be an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions:The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the past 60 days, the Zacks Consensus Estimate for United Airlines’ fourth-quarter 2022 earnings has moved up more than 100% year over year. For 2022, the company’s earnings are expected to increase more than 100% year over year.
Positive Earnings Surprise History: United Airlines has an impressive earnings surprise history. The company delivered an earnings surprise of 7.77% in the last four quarters, on average.
Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For fourth-quarter 2022, United Airlines’ earnings are expected to register more than 100% growth. For 2022 and 2023, the company’s earnings are expected to grow more than 100% year over year, each.
Growth Factors: United Airlines is seeing a steady recovery in domestic and leisure air-travel demand. On the back of upbeat air-travel demand, UAL was profitable in the third quarter of 2022. The third quarter was the second consecutive profitable quarter for UAL since the onset of the pandemic.
Management also believes that air-travel demand and pricing trends will remain strong in the December-end quarter. UAL expects the adjusted operating margin in the December-end quarter to be 10%, rising above the 2019 levels (pre-coronavirus) for the first time. Driven by solid demand, management expects TRASM to increase 24-25% in the December-end quarter from fourth-quarter 2019 actuals. UAL expects fourth-quarter earnings per share of $2-$2.25. UAL is on track to achieve a pre-tax margin of 9% in 2023.
Other Stocks to Consider
Some other top-ranked stocks from the broader Zacks Transportation sector are Ryder Systems ((R - Free Report) ) and Teekay Tankers Ltd. ((TNK - Free Report) ), each currently carrying a Zacks Rank #2.
Ryder has an expected earnings growth rate of 67.12% for the current year. R delivered a trailing four-quarter earnings surprise of 30.13%, on average.
The Zacks Consensus Estimate for R’s current-year earnings has improved 6.9% over the past 90 days. Shares of R have gained 1.1% over the past year.
Teekay Tankers has an expected earnings growth rate of 236.67% for the current year. TNK delivered a trailing four-quarter earnings surprise of 42.23%, on average. Teekay Tankers has a long-term expected growth rate of 3%.
The Zacks Consensus Estimate for TNK’s current-year earnings has improved 87.5% over the past 90 days. Shares of TNK have soared 167.9% over the past year.