TD Cowen analyst Helane Becker reiterated a Buy rating on United Airlines Holdings (UAL – Research Report) today and set a price target of $65.00.
Helane Becker has given her Buy rating for United Airlines Holdings due to a combination of factors that suggest a positive outlook for the company. United Airlines reported fourth quarter results for 2023 that exceeded expectations, which demonstrates the company’s strength despite providing a first-quarter forecast for 2024 that was slightly below consensus estimates. The lower forecast for the first quarter is attributed to several challenges, including MAX9-related cost pressures, changes in distribution expense accounting, labor, and maintenance costs. However, the fiscal year 2024 guidance is more optimistic and above consensus, which indicates confidence in the airline’s long-term strategy and potential for growth.
Becker’s assessment also takes into account United Airlines’ long-term progress and the encouraging trends shared during the company’s guidance outlook. While the 2024 earnings per share (EPS) estimate of $9.76 is somewhat conservative, sitting just below the midpoint of the company’s own forecast, Becker opts for a cautious approach given that it is still early in the year. Her decision to increase the price target to $65 per share reflects a valuation of approximately 4.1 times the estimated 2025 enterprise value to EBITDAR ratio. This adjustment suggests that the company’s future earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs are expected to be robust and that the stock is currently undervalued.
In another report released yesterday, Bank of America Securities also maintained a Buy rating on the stock with a $56.00 price target.
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Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of UAL in relation to earlier this year.
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United Airlines Holdings (UAL) Company Description:
UAL Corp. provides air transportation services through it’s subsidiary, United Airlines, Inc., in North America, the Pacific, the Atlantic and Latin America. It offers transportation of passengers and cargo. The company operates 3,400 flights and 200 United States domestic and international destinations from its hubs in Los Angeles, San Francisco, Denver, Chicago and Washington. The company was founded in 1934 and is headquartered in Chicago, IL.
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