United Airlines Analysts Remain Bullish As Revenue Exceeds Estimates

United Airlines Holdings Inc UAL reported fourth-quarter earnings after the market closed on Tuesday. The following are the comments from different analysts regarding the company’s report.

Goldman Sachs analyst Catherine O'Brien maintained a $125 price forecast on the stock, based on a normalized EBITDAR
valuation methodology applying a 4.9x EV/EBITDAR multiple to a normalized EBITDAR estimate of $12.8 billion.

United reported an adjusted EPS of $3.26 for the December quarter, surpassing both FactSet consensus ($3.03) and its own guidance range ($2.50 to $3).

This outperformance was driven by stronger-than-expected revenue, with unit revenue (RASM) rising 1.6%, ahead of the expected 0.2%. The company also set its 2025 EPS guidance at $11.50 to $13.50, slightly below the consensus estimate of $12.78.

According to the analyst, investor focus was expected to be on the revenue assumptions behind the 2025 EPS guidance, as year-over-year comparisons would be easier later in the year than in the March quarter.

Raymond James analyst Savanthi Syth reiterated an Outperform rating on the air carrier’s shares.

Like Delta Air Lines Inc DAL, United’s fourth-quarter 2024 earnings and first-quarter 2025 guidance exceeded expectations, though the latter followed a significant rise in fuel prices, said the analyst.

Importantly, year-over-year RASM for international routes was positive in the fourth-quarter 2024 and United anticipated domestic year-over-year RASM to turn notably positive in first-quarter 2025, alongside continued growth in international RASM, noted the analyst.

The 2025 EPS forecast of $11.50-$13.50 compared to analyst’s and consensus projections of $12 and $12.80, respectively, aligning with buy-side expectations of $12-$14 before the recent fuel price hike.

Bank of America analyst Andrew Didora maintained a Buy rating on the shares and said United’s fourth-quarter FY24 EPS of $3.26, exceeded its guidance of $2.50-$3 and the consensus estimate of $3.04, though slightly under the analyst’s forecast of $3.34 due to higher fuel and unit costs.

Despite a nearly 8% increase in fuel prices, year-to-date concerns that United might guide below consensus were alleviated by strong revenue trends, noted the analyst.

The analyst considered United’s 2025 EPS guidance of $11.50-$13.50 to be quite reasonable, compared to the Street's estimate of $12.77.

The analyst believed the company’s current outlook reflected a balanced approach to both jet fuel costs and revenue trends and anticipated consensus estimates would rise following this outlook.

The growth in premium revenue, recovery in corporate travel and robust transatlantic sales contributed to a 7.8% increase in total fourth quarter 2024 revenue, said the analyst.

UAL Price Action: United shares are trading down by 1.03% at $109.38 at publication Wednesday.