Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Goldman Sachs has reiterated its Buy rating on United Airlines (NASDAQ:UAL) stock with a price target of $92.00, according to a research note released Wednesday. The airline, currently trading at $88.47 with a market cap of $28.89 billion, shows strong financial health according to InvestingPro data, with a notably low P/E ratio of 7.95.
United Airlines reported adjusted earnings per share of $3.87 for the June quarter, exceeding both the FactSet consensus estimate of $3.81 and Goldman Sachs’ estimate of $3.60. The earnings also came in above the midpoint of the company’s guidance range of $3.25 to $4.25. This performance aligns with InvestingPro’s analysis, which highlights United’s strong return metrics and efficient capital management.
The airline has introduced September quarter EPS guidance of $2.25 to $2.75, with the midpoint slightly below consensus expectations of $2.58 but ahead of Goldman Sachs’ estimate of $2.25. United also updated its full-year 2025 EPS outlook to between $9.00 and $11.00, with the midpoint aligning with consensus estimates of $10.03.
Goldman Sachs noted that United’s earnings beat was primarily driven by lower-than-expected non-fuel operating costs, partially offset by lower-than-expected revenue. This represents a reduction from the company’s previous 2025 guidance of $11.50 to $13.50 shared last quarter.
The revised outlook includes the impact of operational issues at Newark Airport, one of United’s largest hubs, which caused a 120 basis point drag on June quarter margins and is expected to impact September quarter margins by approximately 90 basis points, with no impact anticipated for the December quarter. Despite these challenges, InvestingPro analysis reveals the company maintains a "GREAT" overall financial health score, with 12 additional key insights available to subscribers through the comprehensive Pro Research Report.
In other recent news, United Airlines reported strong second-quarter earnings, with earnings per share of $3.87, surpassing BofA Securities’ estimate of $3.77 and the consensus of $3.84. BofA Securities maintained its Buy rating on United Airlines, highlighting the airline’s premium cabin exposure as a differentiator. Meanwhile, United Airlines’ proposed "Blue Sky" partnership with JetBlue Airways (NASDAQ:JBLU) has come under scrutiny from U.S. Senator Richard Blumenthal, who expressed concerns about potential impacts on competition and pricing. Additionally, United Airlines has suspended flights to Tel Aviv amid regional tensions, joining Delta Air Lines (NYSE:DAL) in this precautionary measure. In a separate development, United Airlines has invested in JetZero, a U.S. aircraft startup, placing a conditional order for up to 100 fuel-efficient airplanes. France’s aviation authorities have requested airlines, including United, to cut flights to Paris and other airports due to an air traffic controller strike. These recent developments highlight a mix of financial performance, strategic partnerships, and operational adjustments for United Airlines.
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