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United Airlines (UAL) Sees a More Significant Dip Than Broader Market: Some Facts to Know

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United Airlines (UAL - Free Report) closed at $73.65 in the latest trading session, marking a -6.2% move from the prior day. This change lagged the S&P 500's 0.84% loss on the day. Meanwhile, the Dow experienced a drop of 0.7%, and the technology-dominated Nasdaq saw a decrease of 0.91%.

The airline's shares have seen an increase of 0.76% over the last month, surpassing the Transportation sector's loss of 0% and falling behind the S&P 500's gain of 1.44%.

Analysts and investors alike will be keeping a close eye on the performance of United Airlines in its upcoming earnings disclosure. In that report, analysts expect United Airlines to post earnings of $3.82 per share. This would mark a year-over-year decline of 7.73%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.31 billion, up 2.13% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $9.95 per share and a revenue of $58.67 billion, demonstrating changes of -6.22% and +2.82%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for United Airlines. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 2.15% fall in the Zacks Consensus EPS estimate. At present, United Airlines boasts a Zacks Rank of #4 (Sell).

In terms of valuation, United Airlines is currently trading at a Forward P/E ratio of 7.89. This expresses a discount compared to the average Forward P/E of 9.31 of its industry.

One should further note that UAL currently holds a PEG ratio of 1.26. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Transportation - Airline industry had an average PEG ratio of 0.88.

The Transportation - Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 47, which puts it in the top 20% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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