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Tuesday, analysts at BofA Securities reaffirmed their positive stance on United Airlines (NASDAQ:UAL) shares, maintaining a Buy rating and a $90.00 price target. The endorsement comes as the airline navigates a complex macroeconomic landscape with varying scenarios for 2025 earnings per share (EPS). Currently trading at $65.30, InvestingPro analysis suggests the stock is slightly undervalued, with analyst targets ranging from $42 to $135.
In a recent note, BofA’s Andrew Didora highlighted United Airlines’ guidance, which presents two potential EPS outcomes for 2025: one assuming stable demand and the other accounting for a potential U.S. recession. Amid these uncertainties, BofA has set its 2025 EPS forecast for United Airlines at $10.14, slightly above the consensus on Wall Street of $10.10. This projection is strategically positioned between United Airlines’ own stable scenario, which anticipates an EPS of $11.50-13.50, and the recessionary scenario with an EPS of $7-9. The company currently trades at an attractive P/E ratio of 5.84, significantly below industry averages. InvestingPro data reveals 12 additional key insights about UAL’s valuation metrics and growth potential.
The analyst underscored the airline’s capacity to differentiate itself during periods of challenging demand. The optimism is rooted in United Airlines’ diversified revenue streams, which include corporate, leisure, premium, and international sectors. Additionally, the company’s robust loyalty program and its ability to generate free cash flow contribute to the positive outlook.
BofA’s reiterated Buy rating is a vote of confidence in United Airlines’ potential to outperform, regardless of the economic conditions that may unfold. The airline’s strategic advantages are expected to support its performance in the face of macroeconomic uncertainty and potential demand fluctuations in the coming years.
In other recent news, United Airlines reported a strong performance in the first quarter of 2025, with earnings per share (EPS) of $0.91, surpassing the forecasted $0.77. The company’s revenue reached $13.2 billion, slightly below the expected $13.37 billion. Despite the revenue shortfall, the airline’s pretax margin improved by 3.6 percentage points year-over-year, highlighting effective cost management. Analyst Jamie Baker from JPMorgan revised United Airlines’ stock price target to $122, down from $133, while maintaining an Overweight rating. Baker acknowledged United’s potential to remain profitable during an economic downturn, a rare achievement among U.S. airlines. Meanwhile, UBS analyst Thomas Wadewitz increased the price target for United Airlines shares to $67 from $59, maintaining a Neutral rating, citing the airline’s strong first-quarter performance and proactive share buybacks. United Airlines has repurchased $451 million worth of shares through April 10. Both analysts express caution due to potential economic challenges that could impact United Airlines’ future performance.
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