Back to top

Image: Bigstock

United Airlines (UAL) Stock Up on Upbeat 3Q Revenue View

Read MoreHide Full Article

Shares of United Airlines Holdings, Inc. (UAL - Free Report) performed well on Sep 7, closing the trading session at $38.60, up 5.52% from the Sep 6 closing price. The upside was owing to the bullish revenue guidance provided by UAL for third-quarter 2022 on the back of a robust demand environment.

For the third quarter, United Airlines now anticipates total operating revenues to grow almost 12% from the September quarter of 2019, higher than the prior expected growth rate of about 11% (provided during the company’s second-quarter 2022 earnings release on Jul 20).

United Airlines is seeing a steady recovery in domestic and leisure air-travel demand. Recovery in business travel demand has also picked up pace. With this, the company expects to be profitable in the third quarter like the second quarter of 2022.

The company expects total revenue per available seat mile (TRASM) to increase around 25% in the third quarter from the comparable period’s number in 2019 (previous view: up in 24-26% band). Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, third-party business expenses, profit-sharing and special charges, is anticipated to increase roughly 16% in the September quarter from the corresponding quarter of 2019 (previous view: 16-17%). Adjusted operating margin is expected to be approximately 10.5% in the September quarter, higher than the prior guidance of 10%.

The positivity surrounding the stock is evident from the northward movement of the Zacks Consensus Estimate for third-quarter earnings, which has improved 22.7% over the past 90 days.

For the third quarter, United Airlines expects capacity to be down 10% to 11% from the third quarter of 2019 (previous view: down around 11%). UAL now forecasts the average aircraft fuel price per gallon to be $3.83 in the third quarter (previous view: $3.81).

Zacks Rank and Stocks to Consider

Currently, United Airlines carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks from the broader Zacks Transportation sector are GATX Corporation (GATX - Free Report) , Triton International Limited and Teekay Tankers Ltd. (TNK - Free Report) , each currently carrying a Zacks Rank #2 (Buy).

GATX Corporation has an expected earnings growth rate of 17.8% for the current year. GATX delivered a trailing four-quarter earnings surprise of 28.9%, on average.

The Zacks Consensus Estimate for GATX’s current-year earnings has improved 2.1% over the past 90 days. Shares of GATX have gained 5.9% over the past year.

Triton has an expected earnings growth rate of 22.4% for the current year. TRTN delivered a trailing four-quarter earnings surprise of 7.5%, on average. TRTN has a long-term expected growth rate of 10%.

The Zacks Consensus Estimate for TRTN’s current-year earnings has improved 4.2% over the past 90 days. Shares of TRTN have increased 12.8% over the past year.

Teekay Tankers has an expected earnings growth rate of 140.1% for the current year. TNK delivered a trailing four-quarter earnings surprise of 46.1%, on average. TNK has a long-term expected growth rate of 3%.

The Zacks Consensus Estimate for TNK’s current-year earnings has improved more than 100% over the past 90 days. Shares of TNK have soared 106.3% over the past year.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


United Airlines Holdings Inc (UAL) - free report >>

Teekay Tankers Ltd. (TNK) - free report >>

GATX Corporation (GATX) - free report >>

Published in