United Airlines Holdings Inc UAL shares hit a new 52-week high of $74.56 this week following the company’s third-quarter earnings report released Tuesday after the market closed.
What Happened: The Chicago-headquartered airline reported revenue of $14.843 billion, exceeding the consensus estimate of $14.783 billion, while adjusted earnings per share reached $3.33, surpassing analyst predictions of $3.13.
UAL’s capacity grew by 4.1% year-over-year, indicating an expansion in service expected to bolster future revenue. Despite a slight decrease in total revenue per available seat mile (TRASM) of 1.6%, operating cash flow remained strong at $7.2 billion, with free cash flow totaling $3.4 billion year-to-date.
This fiscal strength is further emphasized by United's liquidity position of $17.1 billion, although it carries $25.7 billion in total debt and finance lease obligations.
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CEO Scott Kirby noted that the removal of unproductive capacity from the market in mid-August led to a notable improvement in revenue trends, allowing United to exceed third-quarter expectations.
His comments reflect a positive outlook for the airline, highlighting a strategy focused on enhancing customer experience through initiatives like United Next.
What Else: In a move that signals confidence in its financial trajectory, United's board approved a new share repurchase program worth up to $1.5 billion, which could potentially bolster stock performance by reducing the number of shares outstanding.
However, the airline's outlook for the fourth quarter suggests a slight pullback in adjusted earnings expectations, projecting earnings per share between $2.50 and $3, compared to analyst estimates of $3.17.
Overall, the strong financial results and strategic initiatives are likely to positively influence United Airlines’ stock performance, continuing the bullish momentum it has experienced throughout the year, with a reported gain of 56% so far.
As investors react to the earnings report, the market will closely monitor United's capacity management and customer experience enhancements, which are essential for sustaining its competitive position in the airline industry.
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How To Buy UAL Stock
By now you're likely curious about how to participate in the market for United Airlines Holdings – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.
In the the case of United Airlines Holdings, which is trading at $73.33 as of publishing time, $100 would buy you 1.36 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
According to data from Benzinga Pro, UAL has a 52-week high of $74.56 and a 52-week low of $33.68.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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