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United Airlines Holdings Inc (UAL) - $25 value - yours FREE >>
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United Airlines Holdings Inc (UAL) - $25 value - yours FREE >>
Ryder System, Inc. (R) - $25 value - yours FREE >>
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Reasons to Hold on to United Airlines (UAL) Stock For Now
United Airlines Holdings (UAL - Free Report) is benefiting from continued improvement in leisure air-travel demand, as reflected in its second-quarter 2021 results. The company’s top line jumped more than 100% year over year in the June quarter due to massive rise in passenger revenues. The airline anticipates third-quarter 2021 TRASM (total revenue per available seat miles) growth to be positive. Although a full recovery in travel demand is not expected any time soon, the company anticipates demand to continue improving this year.
To cater to the uptick in travel demand, United Airlines placed its biggest jet order in June. The carrier has decided to purchase 200 Boeing 737 MAX and 70 Airbus A321neo jets while replacing the older, smaller mainline and regional jets with larger aircraft. United Airlines expects the newer aircraft, featuring more premium seats with larger overhead bins and seatback entertainment screens, to improve fuel efficiency by 11% as well as reduce carbon emission per seat by 17-20% compared with the older ones.
The Chicago, IL-based airline’s cost-control initiatives are supporting its bottom line. Consolidated unit cost or cost per available seat mile (CASM) excluding fuel, third-party business expenses, profit-sharing and special charges, dropped 71.2% year over year in the June quarter. The carrier anticipates 2022 CASM, excluding fuel, profit sharing, third-party business expenses and special charges, to be lower than the 2019 level.
United Airlines Holdings Inc Price and Consensus
United Airlines Holdings Inc price-consensus-chart | United Airlines Holdings Inc Quote
The optimism surrounding the stock is evident from the Zacks Consensus Estimate for the company’s 2021 loss being narrowed by 16% in the past 60 days. In light of the abovementioned positives, we believe investors should retain the United Airlines stock in their portfolios now, as is suggested by its Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks in the broader Transportation sector are SkyWest (SKYW - Free Report) , GATX Corporation (GATX - Free Report) and Ryder System (R - Free Report) . While SkyWest and Ryder sport a Zacks Rank #1 (Strong Buy) each, GATX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of SkyWest and GATX have rallied more than 34% each in a year’s time, while Ryder shares have gained more than 93%.