United Airlines (UAL) stock could be an intriguing choice for investors, according to Wall Street analysts. The analysts polled by Reuters have given the stock a consensus ~2.05 rating and a “buy” recommendation. Their average target price suggests a strong double-digit upside potential in United Airlines’ stock price over the next year.
Approximately 67% of analysts have provided bullish recommendations on United Airlines. Among the 21 analysts covering the stock, seven have given it “strong buys,” seven have given it “buys,” six have given it “holds,” and one has given it a “sell.” Analysts’ forward target price of $104.59 on United Airlines signifies a potential return of 26% in the next year.
United Airlines’ better-than-expected quarterly results for five consecutive quarters have driven this bullish sentiment. The airline’s revenues and earnings have also marked significant year-over-year improvements in the last five quarters.
United Airlines is strategically adding more connecting flights to smaller cities where it can charge higher fares. Furthermore, analysts believe that its cost-cutting initiatives will boost its margins and profits in the long run.
Analysts have maintained a bullish recommendation on most US airlines. They’ve provided consensus “buy” recommendations on Spirit Airlines (SAVE), Delta Air Lines (DAL), and Alaska Air Group (ALK). Spirit Airlines, Delta Air Lines, and Alaska Air Group’s target prices show potential upsides of ~45.5%, 22.3%, and 17%, respectively, from their current prices.
To gain exposure to passenger airline stocks, you can invest in the iShares Transportation Average ETF (IYT). The ETF has allocated 16.7% of its fund in the passenger airline space and has returned 14.7% so far in 2019. IYT has also outperformed the gains of the Dow Jones and the S&P 500, which are up 10.9% and 14.3%, respectively.