Following United Continental’s (UAL) 4Q15 earnings release, analysts’ consensus 1Q16 estimates remained unchanged. Sales are expected to decline by 0.61% at $37.63 billion. Its EBITDA (earnings before interest, tax, depreciation, and amortization) is expected to grow by 15.5% to $1,351 million.
For 2016, analysts estimate that sales will decrease by 0.6% to $37.6 billion while EBITDA could grow by 10.5% to $7,716 million. EPS (earnings per share) is expected to rise by ~173% to $1.91.
Analysts are expecting UAL to maintain sales growth at 3% for 2017 and 2018. However, the growth in profitability is expected to slow going forward. For both 2017 and 2018, analysts are expecting EBITDA to decline by 5.5%. EPS is expected to increase by 4% and 12% in 2017 and 2018, respectively.
Of the 16 analysts rating the stock, 93.8% (15 analysts) have a “buy” rating, 6.3% (one analyst) has a “hold” rating, and no analysts have a “sell” rating.
UAL’s consensus 12-month target price is $77.38, which indicates a 65.6% return potential. Analysts’ 12-month target prices for UAL’s peers are as follows:
- American Airlines (AAL): $54.4 with 32.7% return potential
- Delta Air Lines (DAL): $65.79 with 35.5% return potential
- JetBlue Airways (JBLU): $29.21 with 34% return potential
- Southwest Airlines (LUV): $53.5 with 24.9% return potential
- Spirit Airlines (SAVE): $53.18 with 25.3% return potential
- Alaska Air Group (ALK): $91.81 with 19% return potential
UAL comprises ~5% of the Dynamic Leisure & Entertainment Portfolio ETF (PEJ). In the next article, we will wrap up this series by looking at UAL’s valuation compared to its peers.