Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Evercore ISI raised its price target on United Airlines (NASDAQ:UAL) to $105.00 from $100.00 on Thursday, while maintaining an Outperform rating on the stock. The airline, currently valued at $29.82 billion, has seen its stock surge 88.47% over the past year, according to InvestingPro data.
The price target increase follows United Airlines’ second-quarter earnings report, which showed earnings per share of $3.87, exceeding Evercore’s estimate of $3.75. The airline’s performance benefited from better-than-expected non-fuel unit costs, which increased 2.2% compared to Evercore’s projection of 2.8%. With an EBITDA of $8.32 billion and trading at a P/E ratio of just 8.26, InvestingPro analysis suggests the stock is currently undervalued.
Evercore noted that United Airlines has experienced improved booking activity since early July, with business travel specifically accelerating and nearly fully recovering year-over-year in July. Domestic booked yields have turned positive year-over-year, although 50% of third-quarter bookings were already secured before the July 1st improvement. The airline’s total revenue stands at $57.99 billion, with a healthy gross profit margin of 34.65%. Get access to 12 additional exclusive InvestingPro Tips and comprehensive analysis in the Pro Research Report.
The research firm viewed United’s second-half ex-fuel unit cost commentary favorably, contributing to their more optimistic outlook for the airline’s financial performance.
Following the analysis, Evercore raised its fiscal year 2025 earnings per share forecast to $10.15 from $9.90 previously, and increased its 2026 EPS estimate to $11.25 from $11.00.
In other recent news, United Airlines reported second-quarter earnings per share of $3.87, surpassing consensus estimates and the projections of several analyst firms, including UBS, Citi, Goldman Sachs, and BofA Securities. Despite facing operational challenges at its Newark hub, United’s earnings performance was bolstered by lower-than-expected non-fuel operating costs. The airline’s revenue per available seat mile declined 4% year-over-year, slightly below expectations. United revised its 2025 earnings per share guidance to a range of $9.00 to $11.00, aligning with consensus estimates and reflecting adjustments for operational issues.
UBS maintained its Buy rating with a price target of $103.00, while Evercore ISI reiterated an Outperform rating with a $100.00 target. Citi also kept its Buy rating, setting a price target at $106.00, and Goldman Sachs maintained a Buy rating with a $92.00 target. BofA Securities echoed the positive sentiment with a Buy rating and a $90.00 price target. United Airlines noted an increase in booking activity, particularly in business travel, and anticipates a downward trend in industry supply starting mid-August. These developments highlight United’s strategic adjustments and the analysts’ continued confidence in the airline’s financial trajectory.
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