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Here's Why United Airlines (UAL) Should Grace Your Portfolio
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The uptick in air-travel demand (particularly on the domestic front) bodes well for United Airlines (UAL - Free Report) . On the back of upbeat air-travel demand, UAL witnessed a profitable third-quarter 2022. The third quarter was the second consecutive profitable quarter at UAL since the onset of the pandemic.
Let's delve deeper to unearth the factors that make United Airlines an attractive pick currently.
Northward Earnings Estimates: The Zacks Consensus Estimate for fourth-quarter earnings has been revised 114% upward over the past 60 days. For 2022, the consensus mark for earnings has skyrocketed 385.4% north in the same time frame. The highly favorable estimate revisions reflect the confidence of brokers in the stock.
Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because the path of estimate revisions serves as an important pointer when it comes to ascertaining the stock price.
Upbeat Price Performance: Shares of UAL have performed well on the bourses, gaining 24.3% over the past three months, whereas its industry has appreciated 8.5% in the same timeframe.
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. Per our research, 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. Hence, UAL seems an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bullish Industry Rank: The industry to which United Airlines belongs currently has a Zacks Industry Rank of 63 (of 250 plus groups). Such a solid rank places the industry in the top 25% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, a mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Other Tailwinds: Due to an upside in air-travel demand, United Airlines posted a significant year-over-year increase (about 75%) in third-quarter 2022 passenger revenues. Management believes that air-travel demand and pricing trends will remain strong in the December quarter as well. Driven by solid demand, management expects total revenue per available seat mile (TRASM) to increase in the 24-25% band in the December quarter from the fourth-quarter 2019 actuals.
United Airlines’ environment-friendly moves are also laudable. UAL aims to achieve net-zero emissions by 2050 without using any carbon offset mechanism. United Airlines’ focus on its cargo operations is boosting cargo revenues which increased nearly 5% year over year in the first nine months of 2022.
Other Key Picks
Investors interested in the broader Transportation sector may also consider the following stocks:
Covenant Logistics (CVLG - Free Report) : CVLG offers a portfolio of transportation and logistics services, including asset-based expedited, dedicated and irregular route truckload capacity, besides asset-light warehousing, transportation management and freight brokerage capability.
The gradually-improving freight market scenario is a tailwind to Covenant. CVLG’s cost-control efforts are appreciated as well. CVLG currently sports a Zacks Rank #1. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 10.1% upward over the past 60 days.
Teekay Tankers (TNK - Free Report) : TNK is being well-served by the increase in tanker rates. A gradual ramp-up in economic activities also bodes well. High fuel costs are, however, weighing on the bottom line.
Teekay Tankers currently sports a Zacks Rank #1. TNK’s shares have increased 35.2% over the past three months. Over the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved 87.6% north.
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Here's Why United Airlines (UAL) Should Grace Your Portfolio
The uptick in air-travel demand (particularly on the domestic front) bodes well for United Airlines (UAL - Free Report) . On the back of upbeat air-travel demand, UAL witnessed a profitable third-quarter 2022. The third quarter was the second consecutive profitable quarter at UAL since the onset of the pandemic.
Let's delve deeper to unearth the factors that make United Airlines an attractive pick currently.
Northward Earnings Estimates: The Zacks Consensus Estimate for fourth-quarter earnings has been revised 114% upward over the past 60 days. For 2022, the consensus mark for earnings has skyrocketed 385.4% north in the same time frame. The highly favorable estimate revisions reflect the confidence of brokers in the stock.
Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because the path of estimate revisions serves as an important pointer when it comes to ascertaining the stock price.
Upbeat Price Performance: Shares of UAL have performed well on the bourses, gaining 24.3% over the past three months, whereas its industry has appreciated 8.5% in the same timeframe.
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. Per our research, 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. Hence, UAL seems an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bullish Industry Rank: The industry to which United Airlines belongs currently has a Zacks Industry Rank of 63 (of 250 plus groups). Such a solid rank places the industry in the top 25% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, a mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Other Tailwinds: Due to an upside in air-travel demand, United Airlines posted a significant year-over-year increase (about 75%) in third-quarter 2022 passenger revenues. Management believes that air-travel demand and pricing trends will remain strong in the December quarter as well. Driven by solid demand, management expects total revenue per available seat mile (TRASM) to increase in the 24-25% band in the December quarter from the fourth-quarter 2019 actuals.
United Airlines’ environment-friendly moves are also laudable. UAL aims to achieve net-zero emissions by 2050 without using any carbon offset mechanism. United Airlines’ focus on its cargo operations is boosting cargo revenues which increased nearly 5% year over year in the first nine months of 2022.
Other Key Picks
Investors interested in the broader Transportation sector may also consider the following stocks:
Covenant Logistics (CVLG - Free Report) : CVLG offers a portfolio of transportation and logistics services, including asset-based expedited, dedicated and irregular route truckload capacity, besides asset-light warehousing, transportation management and freight brokerage capability.
The gradually-improving freight market scenario is a tailwind to Covenant. CVLG’s cost-control efforts are appreciated as well. CVLG currently sports a Zacks Rank #1. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 10.1% upward over the past 60 days.
Teekay Tankers (TNK - Free Report) : TNK is being well-served by the increase in tanker rates. A gradual ramp-up in economic activities also bodes well. High fuel costs are, however, weighing on the bottom line.
Teekay Tankers currently sports a Zacks Rank #1. TNK’s shares have increased 35.2% over the past three months. Over the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved 87.6% north.