Shares of United Airlines (UAL) gained in today’s trading as investors await its Q2 earnings results on July 17 after the market closes. Analysts are expecting earnings per share to come in at $3.96 on revenue of $14.961 billion. This represents a decline from the $5.04 per share seen in the year-ago period, according to TipRanks’ data.
However, DAL has beaten earnings estimates for seven consecutive quarters (as pictured below), and it’s still possible for earnings to grow in comparison to last year’s results, especially when considering how large the company’s beat was in last year’s Q2 ($5.03 vs $4.03).
Interestingly, this possibility isn’t too far-fetched when taking a quick look at UAL’s website traffic. In fact, visits increased by over 40% compared to Q2 2023, which suggests that travel demand is strong. However, the key issue that will make all the difference will be how UAL handles its increasing expenses. Indeed, TipRanks’ Bulls Say, Bear Say tool highlights operating margins as an important bearish factor due to the rising cost pressures from new pilot labor contracts and higher maintenance costs.
Is United Airlines a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on UAL stock based on 16 Buys assigned in the past three months, as indicated by the graphic below. After a 13% loss in its share price over the past year, the average UAL price target of $71.70 per share implies 54.56% upside potential.
