United Airlines (UAL) Possible Gap Up Post Earnings If EPS and Revenue Surprise

Airlines are facing higher costs and increased industry capacity that has driven down fares compared with last year. So will UAL face the same situation even though DAL reported record revenue, but its summer outlook disappoints.

Market is feeling optimistic about UAL with Buy rating suggested for the stock. From Seeking Alpha contributor Mountain Valley Value Investments notes that despite challenges, United Airlines (UAL) is focused on growth and profitability with a clear plan for the future.

Given its higher margins, lower debt multiple, and positive outlook, the contributor believes that United Airlines shares should not trade at such a discount to its peers.

Market is expecting consensus for EPS estimates to be at $3.96, consensus revenue estimates to be $15.02B. Given that United Airlines has beaten EPS and revenue estimates in 7 of the past 8 quarters, we might be expecting a surprise from UAL.

Considering the year-to-date return of around 14% to investors, UAL have been able to maintain the growth, with higher margins, lower debt multiple, and positive outlook, UAL should be able to do better in 2024.

With the recovery of travel, the actual effect should be coming in this upcoming quarter.

Based on 16 Wall Street analysts offering 12 month price targets for United Airlines Holdings in the last 3 months. The average price target is $71.70 with a high forecast of $98.00 and a low forecast of $60.00. The average price target represents a 52.33% change from the last price of $47.07.

If we were to look at the price for UAL, I would say it is pretty undervalued at the current price, I would think that UAL should be trading in the range of $75 to $80.

If we looked at the MACD, we can see potential forming of a bullish crossover, with the recent price move, there are still room for UAL to create new highs, if you look at how it moves in the last earnings release, it actually have a nice upside before declining after a few days.

If UAL could provide a positive outlook and net income is much better than its peers, then the KDJ signal for a potential buy now, could be a potential time to enter.

From the earnings move, we are expecting to see a dip before UAL stock price start to go up, if we were to look at the previous earnings, there is a gap up post earnings.

The estimates was beaten and we have a surprise from UAL in March, so are we expecting the same?

As we can see that the airlines has started to release their Q2 earnings, Delta Airlines report record revenue but net income fell, so what can we read from that?

The margin from earnings is key and how investors would be looking is positive outlook and the low expenses, but net income increase. These would be things that I would be focusing.

I might take a small position on United Airlines (UAL) in today (17 July) before its earnings.

Appreciate if you could share your thoughts in the comment section whether you think UAL would provide a surprise EPS and revenue earnings?

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.