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Investing.com - Freedom Broker raised its price target on United Airlines (NASDAQ:UAL) to $98.00 from $95.00 on Friday, while maintaining a Buy rating on the stock. According to InvestingPro data, the airline, currently valued at $30.1 billion, trades at an attractive P/E ratio of 9.06, suggesting potential upside opportunity.
The firm noted that United Airlines delivered "a generally solid performance" in its latest quarterly results, though it didn’t generate the same positive investor reaction as Delta Air Lines (NYSE:DAL). United’s revenue grew 1.7% year-over-year, despite coming in below both Freedom Broker’s and consensus estimates.
United’s domestic revenue saw a slight decline, aligning with U.S. CPI data showing lower airfare prices throughout Q2. However, international routes continued to see revenue growth, even when adjusted for price fluctuations, with the airline appearing to manage international pricing more effectively than its U.S. peers.
The carrier’s operating margin remained in the double digits despite missing expectations slightly, supported by lower fuel costs, modest improvement in fuel efficiency, and moderate wage growth. Premium cabin revenue continued to grow, though at a slower pace of 5.6% in Q2 versus 9.2% in Q1.
United’s earnings per share benefited from reduced debt, with long-term debt falling by more than 10% in just three months. A 60% drop in other expenses, mainly due to lower interest costs and higher gains from revaluing regional airline investments, helped prevent a significant earnings decline.
In other recent news, United Airlines reported second-quarter earnings per share of $3.87, surpassing various analysts’ estimates, including those from Evercore ISI, UBS, Citi, and Goldman Sachs. The airline’s performance was bolstered by better-than-expected non-fuel unit costs. United Airlines revised its full-year 2025 earnings per share guidance to between $9.00 and $11.00, aligning with consensus estimates and reflecting adjustments due to operational challenges at Newark Airport. Evercore ISI raised its price target for United Airlines to $105 while maintaining an Outperform rating, citing improved booking activity and favorable cost performance. UBS reiterated its Buy rating with a $103 price target, noting the airline’s cost management and network operations. Citi also maintained its Buy rating and a $106 price target, highlighting the airline’s revised guidance above its previous recessionary outlook. Goldman Sachs reiterated its Buy rating with a $92 price target, emphasizing United’s earnings beat driven by lower-than-expected costs. These developments indicate a positive outlook from analysts despite some operational headwinds.
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