Analysts’ bullish stance
Analysts are bullish on United Airlines (UAL), with most recommending “buy.” Their consensus rating is ~2. They expect its stock price to rise by a double-digit percentage over the next year.
Of the 21 analysts covering United Airlines stock, seven recommend “strong buy,” eight recommend “buy,” five recommend “hold,” and one recommends “sell.” Their average target price of $104.76 implies a 26.3% return in the next year.
The company’s strong record of beating analysts’ earnings estimates drove their bullish sentiment. It has surpassed Wall Street earnings forecasts in 12 of the last 13 quarters, and its top and bottom lines have improved significantly year-over-year in the last five quarters.
The company is enhancing its non-ticket offerings and increasing its premium seating capacity to boost revenue. Analysts expect United Airlines’ cost-control measures and fleet transformation initiatives to continue to drive profits higher.
Analysts are bullish on most US airlines, mostly recommending “buy” for Delta Air Lines (DAL), Spirit Airlines (SAVE), and Southwest Airlines (LUV). Their target prices for the stocks imply upsides of 21.4%, 34%, and 18.5%, respectively, from their current prices.
To get exposure in the airline industry, investors could consider the US Global Jets ETF (JETS), which invests in cargo and passenger airlines, aircraft manufacturers, and airport and terminal service companies. JETS has gained 5.6% this year but has underperformed the Dow Jones, which has risen 10.3%.