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On Thursday, UBS analyst Thomas Wadewitz increased the price target for United Airlines (NASDAQ:UAL) shares to $67 from the previous $59 while maintaining a Neutral rating on the stock. The adjustment follows United Airlines’ first-quarter earnings report, which Wadewitz noted demonstrated the airline’s strength through its expansive network, diversified revenue sources, and growth from cultivating a loyal customer base. According to InvestingPro data, analyst targets for UAL currently range from $42 to $135, reflecting diverse market opinions on this $21.4 billion market cap airline.
United Airlines has been actively repurchasing its shares, having bought back $451 million worth through April 10. Wadewitz anticipates that the company will continue its share buyback program, although he suggests that the rate of repurchases may decline if there is a downturn in economic activity and the company’s earnings performance suffers. The company’s strong free cash flow yield of 22% and low P/E ratio of 6.02 suggest financial flexibility for continued buybacks.
The airline’s first-quarter earnings surpassed expectations, signaling robust operational execution amidst a challenging economic landscape. Wadewitz’s commentary underscores United Airlines’ successful strategies and operational efficiency that have contributed to its resilience. InvestingPro analysis shows the company maintains a "GREAT" overall financial health score, with annual revenue reaching $57.7 billion.
Despite the positive execution, UBS maintains a cautious stance on United Airlines’ stock due to potential economic headwinds. Wadewitz points out that concerns about a weakening economic environment could significantly impact the airline’s stock performance moving forward.
In summary, while UBS recognizes United Airlines’ solid first-quarter performance and proactive share buybacks, the firm remains neutral on the stock, citing the possibility of a less favorable economic climate as a persistent concern for the airline’s future.
In other recent news, United Airlines reported a notable performance for the first quarter of 2025, with earnings per share (EPS) reaching $0.91, surpassing the forecast of $0.77. The company’s revenue for the quarter was $13.2 billion, slightly below the expected $13.37 billion. Despite the revenue shortfall, United Airlines demonstrated strong international market performance, particularly in the Pacific region, and introduced Starlink Wi-Fi technology on its aircraft. JPMorgan analyst Jamie Baker revised the price target for United Airlines to $122.00 from $133.00, maintaining an Overweight rating. This adjustment reflects a conservative revenue approach for 2026, with a revised earnings forecast of $13.60, down from $14.55. The analyst noted that United Airlines is uniquely positioned to potentially navigate an economic downturn profitably. The company maintained its full-year EPS guidance of $11.50 to $13.50, showing confidence in its strategic initiatives and financial outlook. Fitch and Moody’s have upgraded United Airlines’ credit ratings, reflecting the company’s financial resilience and improved competitive position.
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