Microvast Holdings announces departure of chief financial officer
On Wednesday, JPMorgan analyst Jamie Baker revised the price target for United Airlines (NASDAQ:UAL) stock to $122.00, down from the previous $133.00, while sustaining an Overweight rating. Currently trading at $67.02 with a market capitalization of $21.84 billion, UAL shows strong fundamentals with an EBITDA of $8.5 billion. Baker’s reassessment comes with an acknowledgment of United Airlines’ unique position in potentially weathering an economic downturn profitably, a feat not previously achieved in the post-deregulation era by any full-service U.S. airline. InvestingPro analysis indicates the stock is currently fairly valued based on its proprietary Fair Value model.
Baker’s commentary highlights that although a profitable recession for United Airlines is not guaranteed, the possibility is already factored into their recessionary analysis and, by extension, their investment thesis for the airline. The analyst noted that United Airlines’ stock has recently activated JPMorgan’s proprietary D3030 trading rule and has undergone a decline consistent with past recessions, with InvestingPro data showing a 31% YTD decline. Despite this drop, the company maintains a GREAT financial health score of 3.03, suggesting strong underlying fundamentals.
The analyst anticipates a gloomy earnings season ahead, especially for airlines without significant premium, loyalty, and international revenue streams. However, he suggests that any negative commentary could actually bolster United Airlines’ long-term prospects. This perspective is informed by the possibility that United could emerge from a recession with higher earnings than if demand returned to January levels and a recession was avoided.
Baker also adjusted his forecast for United Airlines, aligning it between the airline’s two provided guidance scenarios for 2025, setting an earnings target of $10. For 2026, a more conservative revenue approach was adopted, which is less punitive than the approach taken with Delta, due to United’s current margin momentum. This adjustment led to a reduction in the 2026 earnings forecast from $14.55 to $13.60 and consequently, a decrease in the year-end 2025 price target from $133 to $122. Despite the cut, Baker’s new target still significantly exceeds the consensus of $95. InvestingPro subscribers can access 12 additional investment tips and a comprehensive Pro Research Report, offering deeper insights into UAL’s valuation metrics, including its attractive P/E ratio of 6.91x and substantial free cash flow yield of 22%.
In other recent news, United Airlines Holdings Inc. reported its first-quarter 2025 financial results, showcasing an earnings per share (EPS) of $0.91, exceeding the forecasted $0.77. The company’s revenue for the quarter reached $13.2 billion, slightly below the expected $13.37 billion. Despite the revenue shortfall, the company’s performance was bolstered by strong international markets, particularly in the Pacific region. United Airlines introduced Starlink Wi-Fi technology on its aircraft, enhancing its in-flight connectivity offerings. The airline maintained its full-year EPS guidance of $11.50 to $13.50 and expects second-quarter EPS to range between $3.25 and $4.25. Fitch Ratings upgraded United Airlines to BB with a positive outlook, and Moody’s also changed its outlook to positive. United Airlines continues to focus on operational efficiency and cost management, with the company’s pretax margin improving by 3.6 percentage points compared to the previous year.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.