UBS reiterates Buy rating on United Airlines stock with $103 price target

Investing.com - UBS maintained its Buy rating and $103.00 price target on United Airlines (NASDAQ:UAL) following the airline’s second-quarter earnings report. According to InvestingPro data, the stock currently trades at an attractive P/E ratio of 8.14, despite delivering an impressive 88.47% return over the past year.

United Airlines reported second-quarter earnings per share of $3.87, slightly exceeding consensus estimates and approximately 5% above UBS’s forecast. Total (EPA:TTEF) revenue per available seat mile (TRASM) declined 4% year-over-year, which was slightly worse than UBS’s projected 3.5% decrease. The airline maintains strong fundamentals with annual revenue of $57.74B and EBITDA of $8.5B. InvestingPro analysis reveals 13 additional key insights about UAL’s performance and outlook.

Cost per available seat mile excluding fuel (CASM ex) increased 2.2% year-over-year, significantly better than UBS’s estimate of 4.1%. UBS noted that United likely did not book additional expenses from its new flight attendants contract in the second quarter, which contributed to the well-controlled cost performance alongside strong network operations.

United Airlines revised its 2025 earnings per share guidance to a range of $9.00 to $11.00, substantially below its previous "non-recession" guidance of $11.50 to $13.50 per share. The new guidance aligns with consensus estimates of $9.92 per share and UBS’s projection of $9.83.

UBS believes the revised guidance also meets buy-side expectations for the airline’s performance in the coming year.

In other recent news, United Airlines has reported adjusted earnings per share of $3.87 for the second quarter of 2025, surpassing the consensus estimate of $3.81. The airline’s full-year guidance was updated with a midpoint that aligns with consensus estimates, despite challenges at Newark Airport impacting margins. Analysts from Citi, Goldman Sachs, and BofA Securities have all reiterated their Buy ratings on United Airlines stock, with price targets ranging from $90.00 to $106.00. Evercore ISI also maintained an Outperform rating with a $100.00 price target, noting increased booking activity and a demand acceleration in early July.

United’s revised guidance for the third quarter suggests earnings per share between $2.25 and $2.75, slightly below consensus expectations. Operational issues at Newark Airport have been cited as contributing factors to the revised outlook. Additionally, U.S. Senator Richard Blumenthal has expressed concerns over United Airlines’ proposed partnership with JetBlue Airways (NASDAQ:JBLU), questioning its potential impact on competition and fare prices. The senator has requested detailed information from both airlines regarding the partnership’s future plans.

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