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United Airlines (UAL) Laps the Stock Market: Here's Why

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In the latest trading session, United Airlines (UAL - Free Report) closed at $101.16, marking a +1.69% move from the previous day. The stock outpaced the S&P 500's daily gain of 1.1%. At the same time, the Dow added 0.91%, and the tech-heavy Nasdaq gained 1.35%.

Coming into today, shares of the airline had gained 2.74% in the past month. In that same time, the Transportation sector lost 6.52%, while the S&P 500 gained 0.22%.

The investment community will be paying close attention to the earnings performance of United Airlines in its upcoming release. In that report, analysts expect United Airlines to post earnings of $2.97 per share. This would mark year-over-year growth of 48.5%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $14.4 billion, up 5.68% from the year-ago period.

UAL's full-year Zacks Consensus Estimates are calling for earnings of $10.27 per share and revenue of $56.77 billion. These results would represent year-over-year changes of +2.19% and +5.68%, respectively.

Any recent changes to analyst estimates for United Airlines should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.45% higher within the past month. United Airlines is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, United Airlines is holding a Forward P/E ratio of 9.68. For comparison, its industry has an average Forward P/E of 10.28, which means United Airlines is trading at a discount to the group.

We can also see that UAL currently has a PEG ratio of 1.08. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Transportation - Airline was holding an average PEG ratio of 1 at yesterday's closing price.

The Transportation - Airline industry is part of the Transportation sector. This industry, currently bearing a Zacks Industry Rank of 29, finds itself in the top 12% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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