United Continental Holdings Inc (NYSE:UAL)’s Q2 earnings beat demonstrates the airline's execution ability, according to Macquarie.

The Analyst

Macquarie’s Susan Donofrio upgraded United from Neutral to Outperform and raised the firm’s price target on the company from $77 to $95.

The Thesis

United reported a Q2 EPS of $3.23 Tuesday — beating the $3.05 consensus estimate — and raised its full-year EPS outlook.

Donofrio called the results a “positive surprise” that indicated United's commitment to hitting EPS targets. 

Macquarie has grown “increasingly positive” on the stock as the airline executes on commercial initiatives, Donofrio said. 

“We believe its EPS-centric focus will resonate well with investors, and with our valuation rolling to 2019, we believe there is further upside to shares from here.”

United's follow-through on its cost plan and buyback authorization lend further confidence to its EPS leverage, the analyst said. 

Macquarie raised its full-year EPS estimates for United in 2018 and 2019.

“Given the strength of current revenue trends that are offsetting higher fuel prices, we are raising our estimates for United," Donofrio said. 

Price Action

United shares were trading up more than 2 percent at $80.67 at the time of publication Thursday afternoon. 

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