United Airlines stock recently reported its Q2 results, with revenues slightly below and earnings above estimates. The company reported revenue of $14.99 billion and adjusted earnings of $4.14 per share, compared to estimates of $15.15 billion and $3.99, respectively. UAL stock has seen gains of about 5% from early January 2021 to $48 now. However, the increase has not been consistent, with returns of 1% in 2021, -14% in 2022, and 9% in 2023.
UAL has underperformed the S&P 500 in 2021 and 2023. The Trefis High Quality Portfolio, consisting of 30 stocks, has consistently outperformed the S&P 500 each year. Given the current uncertain macroeconomic environment, UAL stock appears undervalued and could see higher levels over time. The company’s revenue in Q2 was up 5.7% year-over-year, with a rise in available seat miles and a decrease in passenger revenue per available seat mile.
The company’s adjusted pre-tax margin fell to 12.1% in Q2’24 from 15.3% in the prior year. United Airlines reported a 3.8% year-over-year rise in average fuel cost per gallon and expects its Q3 adjusted EPS to be in the range of $2.75 and $3.25, with a full-year range of $9 to $11. Despite the mixed Q2 results and bleak Q3 guidance, the company’s stock rose 8% in a week. At its current levels of around $48, UAL stock looks undervalued, trading at 0.3x revenues versus the 0.5x average over the last five years.
Looking forward, United Airlines’ stock may see higher levels as it continues to perform well despite challenges in the industry. Investors can explore how other United Airlines peers fare in comparison and find valuable insights across industries at Peer Comparisons. With an earnings beat and reaffirmed full-year guidance, United Airlines is positioned for potential growth in the coming months.
Overall, United Airlines’ stock performance and financial results indicate potential for growth and higher valuation in the near future. Despite fluctuations in the market and industry challenges, the company has shown resilience and the ability to deliver strong results. Investors may consider UAL stock as a valuable investment opportunity with potential for significant upside in the long term.
