Quick Summary
- UAL releases Q2 results Wednesday; Street anticipates 15.6% year-over-year revenue expansion
- UBS maintains Buy rating and $153 target, suggesting roughly 28% potential gain from ~$120 current level
- UBS projects Q2 EPS at $1.91, topping Street consensus of $1.86
- Delta’s Q2 beatârevenue up 18.7% with 20% corporate growthâoffers encouraging signs for UAL outlook
- Thirteen analysts have boosted UAL earnings projections prior to Wednesday’s announcement
United Airlines (UAL) prepares to unveil second quarter financial results Wednesday afternoon, with market observers keen to assess whether the airline can sustain momentum from earlier in the year. Shares currently hover near $120, while the consensus analyst target sits at $153.97.
United Airlines Holdings, Inc., UAL
On Monday, UBS reaffirmed its Buy stance on UAL while maintaining a $153 price objective. The firm anticipates Q2 earnings per share of $1.91, surpassing the Street’s $1.86 projection and falling within management’s guided range of $1.00 to $2.00.
The Street is modeling revenue growth of 15.6% versus the prior-year period this quarter. That would mark a substantial improvement from the 1.7% expansion recorded in the comparable quarter last year.
During the previous quarter, UAL delivered revenues totaling $14.61 billion, representing 10.6% year-over-year growth. The carrier exceeded earnings expectations but fell short on EBITDA, while recording 63.39 billion revenue passenger milesâa 6.5% increase.
Analyst projections have remained relatively stable throughout the past month. That said, United has fallen short of Wall Street’s revenue forecasts on several occasions over the past 24 months, leading to cautious positioning.
UBS observed that most market participants anticipate performance toward the upper boundary of guidanceâthough not exceeding it. Buy-side expectations for revenue per available seat mile and cost per available seat mile ex-fuel align closely with UBS’s own models.
The firm’s Q2 outlook incorporates 3% available seat mile expansion, 12.8% revenue per available seat mile, 7% cost per available seat mile excluding fuel, and jet fuel priced at $4.25 per gallon.
Delta’s Performance Provides Early Signals
Delta’s recently released Q2 figures offer valuable insight into industry trends. Delta announced revenue growth of 18.7%, exceeding forecasts by 3.9%, with revenue per available seat mile reaching 12.4%.
Delta achieved 20% expansion in corporate revenue alongside a 17% surge in premium revenue. UBS highlighted both metrics as encouraging signals for United, given comparable business profiles.
UBS also suggested that United might demonstrate stronger sequential improvement in its Atlantic operations compared to Delta, which reported Atlantic unit revenue growth of 7%âmatching its first quarter performance.
Delta shares declined 2.8% following the report despite solid fundamentals, illustrating that strong results don’t guarantee immediate stock appreciation.
Additional Developments
Beyond quarterly results, United recently unveiled a redesigned cabin layout for its Airbus A321XLR aircraft, introducing communal table seating in Economy Plus on international routes.
The Federal Aviation Administration separately granted Air Space Intelligence an $875 million contract focused on enhancing U.S. flight scheduling operations. The initiative targets reduced congestion throughout the aviation sector.
InvestingPro data indicates 13 analysts have increased UAL earnings projections ahead of Wednesday’s release, though the platform suggests shares trade above its Fair Value calculation.
United Airlines unveils Q2 earnings Wednesday afternoon.
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