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Investing.com - Jefferies raised its price target on United Airlines (NASDAQ:UAL) stock to $130.00 from $125.00 on Monday, while maintaining a Buy rating on the airline. The new target represents significant upside potential from the current price of $101.14, with analyst targets ranging from $62 to $156.
The price target increase comes despite investor concerns about the company’s 2026 unit costs, which Jefferies noted were clarified by management during recent discussions about margin expansion potential.
Jefferies projects United’s total revenue per available seat mile (TRASM) will increase by 2.7% against a 3.5% rise in cost per available seat mile excluding fuel (CASM-ex) in 2026, with fuel and interest costs driving approximately 40 basis points of improvement to pre-tax margins.
The firm expects United’s pre-tax margins to reach 8.4% before climbing to approximately 10% by 2028, representing about 60 basis points of annual improvement compared to the company’s target of 100+ basis points.
Jefferies believes this margin expansion trajectory could generate more than 15% upside to earnings per share, with the firm noting that long-term CASM-ex growth of 2-3% annually already accounts for labor costs within the 3-4 percentage points of general inflation.
In other recent news, United Airlines reported its third-quarter 2025 earnings, with an earnings per share (EPS) of $2.78, surpassing analysts’ expectations of $2.67. However, the company fell short of revenue forecasts, posting $15.2 billion against the anticipated $15.33 billion. In terms of analyst activity, Morgan Stanley raised its price target for United Airlines to $140, citing a positive outlook for earnings per share growth. TD Cowen also adjusted its price target upwards to $138, maintaining a Buy rating, following the airline’s earnings results and future guidance. Meanwhile, UBS lowered its price target to $128 due to concerns over rising costs, specifically the expected growth in cost per available seat mile excluding fuel in 2026. Additionally, United Airlines CEO Scott Kirby warned about the potential negative impact of the ongoing government shutdown on airline bookings and operations. The shutdown has exacerbated a shortage of air traffic controllers, leading to occasional slowdowns in air traffic.
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