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TheStreet Open House

How Will United Continental Holdings (UAL) Stock React To This Analyst Action Today?

Stocks in this article: UALJPM

NEW YORK (TheStreet) -- Shares of United Continental Holdings  (UAL) are up 2.79% to $47.12 in pre-market trading after it was raised to "overweight" from "neutral" at JPMorgan Chase (JPM) with a $60.50 price target, up from $43.50.

The firm cited the airline company's margin expansion potential. 

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Separately, TheStreet Ratings team rates UNITED CONTINENTAL HLDGS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNITED CONTINENTAL HLDGS INC (UAL) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • UNITED CONTINENTAL HLDGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, UNITED CONTINENTAL HLDGS INC turned its bottom line around by earning $1.30 versus -$2.32 in the prior year. This year, the market expects an improvement in earnings ($4.20 versus $1.30).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Airlines industry average. The net income increased by 68.2% when compared to the same quarter one year prior, rising from $469.00 million to $789.00 million.
  • The revenue growth significantly trails the industry average of 39.3%. Since the same quarter one year prior, revenues slightly increased by 3.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 66.11% and other important driving factors, this stock has surged by 28.45% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The gross profit margin for UNITED CONTINENTAL HLDGS INC is currently lower than what is desirable, coming in at 27.53%. Regardless of UAL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, UAL's net profit margin of 7.63% compares favorably to the industry average.
  • You can view the full analysis from the report here: UAL Ratings Report
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