Opinions
The Panic-Proof Portfolio (Stockchase Research)
United Airlines Holdings
UAL-Q
PAST TOP PICK
Feb 25, 2021
Stock price when the opinion was issued
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Premium contentAs US air travel breaks all time records, we select UAL as a TOP PICK. The FAA just cleared them to continue expansion plans following the recent spat of flight mishaps. It trades at 6x earnings, under 2x book and supports a 33% ROE. Cash reserves are growing, while debt is aggressively retired. We recommend setting a stop-loss at $41, looking to achieve $68 -- upside potential of 30%. Yield 0%
(Analysts’ price target is $68.67)Premium contentPremium contentPremium contentPremium contentPremium contentYesterday, they reported a surprisingly strong quarter with in-line sales, an earnings beat, but share flatlined today. Why? UAL offered 2 sets of guidance--one for a stable economy and the other for a recession. That's a brilliant idea. Bookings could be stable or weaken. Both forecasts are certainly possible.
Premium contentWe reiterate UAL as a TOP PICK. Earnings will be released around mid-month and the market has already factored in a 7% decline in EPS. As customer air miles travelled is set to hit an all time high, we think this is a good time to add to our previous guidance. It trades at 7x earnings, 2x book and supports a robust 33% ROE. We recommend trailing up the stop (from $54) to $63, looking to achieve $99 -- upside potential of 23%. Yield 0%
(Analysts’ price target is $98.95)
(A Top Pick Jul 30/20, Up 23.3%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with UAL has achieved its $53 objective. To be disciplined, we recommend covering 50% of the position and trailing up the stop to $40.