United Airlines (UAL) is set to release its third quarter 2024 financials on October 15. Wall Street analysts expect the company to report earnings of $3.13 per share, representing a 14% decrease year-over-year. However, revenues are expected to increase by 2% from the year-ago quarter to $14.77 billion, according to data from TipRanks.
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It’s important to highlight that though United Airlines is enjoying the post-COVID recovery in long-haul travel, it is still grappling with significant challenges. Delays in aircraft deliveries are limiting United Airlines’ ability to expand and optimize its fleet, and safety incidents are raising concerns about its operational reliability. Moreover, an oversupply of available flights in certain markets is putting pressure on ticket prices and, ultimately, impacting its profitability.
These factors are anticipated to have negatively impacted the company’s performance in Q3.
A Few Other Points to Consider Ahead of Q3
According to TipRanks’ Bulls Say, Bears Say tool shown below, bullish analysts note that United Airlines has a vast international network, with key hubs in major business centers, driving strong international demand. They also remain encouraged about the company’s revenue diversification strategy. Additionally, they note that United is well-positioned to benefit from the rebound in corporate and premium leisure travel.
However, challenges remain. Bears highlight that rising costs, especially due to increasing fuel prices and wage growth in the aviation industry, may impact earnings. They also express concern over United’s weaker-than-expected Q3 guidance, with the EPS forecast of $2.75–$3.25 missing the market’s projection.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can gauge options traders’ expectations for the stock post-earnings report. Based on an $890 strike price, with call options priced at $24.44 and put options at $12.51, the expected price movement, based on the at-the-money straddle is 8.53%.
Is UAL Stock a Good Buy Right Now?
Turning to Wall Street, United Airlines Holdings stock has a Strong Buy consensus rating based on five unanimous buys assigned in the last three months. At $72.20, the average UAL price target implies 21.49% upside potential. Shares of the company have gained 47% in the past three months.
