United Airlines to Outperform US Peers in Medium Term: Analysts Lift Expectations

Raymond James analyst Savanthi Syth maintained United Airlines Holdings Inc UAL with an Outperform and raised the price target from $72 to $76.

The analyst increased her 2023 EPS growth by 8% to $10.84, 2024 EPS growth by 6% to $12.00, and 2025 EPS by 6% to $12.85, primarily reflecting much more substantial LH international revenue.

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The EPS growth boost is partially offset by steps taken to improve operational resiliency and early detail on the pilot contract AIP, primarily due to a change in profit-sharing methodology and difference in wage increase timing vs. the analyst's prior view. 

Syth's 2023 EPS is below the upwardly revised $11 - $12 2023 EPS guide, likely due to her elevated fuel forecast and assumed demand softening. 

Syth believes United's revenue is likely to hold up better than for most U.S. peers in the medium term due to outsized exposure to extensive corporate and international travel (still recovering) and faster growth in its premium offering, with somewhat unique cost tailwinds, including the restoration of the widebody fleet that further stabilizes the operation, up-gauging catch up, and lower regional cost headwind (vs. American). 

JP Morgan analyst Jamie Baker reiterated United Airlines with an Overweight and raised the price target from $70 to $93.

Morgan Stanley analyst Ravi Shanker maintained United Airlines with an Overweight and raised the price target from $75 to $80.

Price Action: UAL shares are trading higher by 1.57% at $57.46 on the last check Friday.