Usually, Wall Street embraces United Continental Holdings Inc. (UAL) - Get Report President Scott Kirby. United shares gained 10% on the day Kirby joined the airline and they have risen 58% in his 11 months on the job.

But on Wednesday United shares fell 6% to $74.24 as Kirby failed to convince some investors that United's current quarter guidance justifies holding onto the stock.

Late Wednesday, JPMorgan analyst Jamie Baker issued a report that questions one of Kirby's key arguments -- that United has been closing its margin gap with Delta Air Lines Inc. (DAL) - Get Report for five consecutive quarters.

"Neither the rate nor magnitude of United relative margin performance has yet risen to the level of materiality, in our view," Baker wrote.

"Based on our 2Q17 vs 2Q16 pretax adjusted analysis, United narrowed its gap by slightly less than one point," Baker said. "The problem is that there are still four points to go, assuming Delta sits still from this perspective. At this rate, this implies between four and five years before margin parity can potentially be achieved."

Baker wrote, "While there have been five quarters of improvement (depending on adjustments), they have not been consecutive. Five quarters, yes (depending on adjustments) but not quite in a row."

He argued that United's margin adjustments exclude the impact of fuel hedges for both airlines and of a portion of Delta pilot pay increases.

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United on Tuesday reported second-quarter earnings and guided toward current quarter unit revenue growth of between minus 1% and up 1%, with a pretax margin between 12.5% and 14.5% and capacity growth of 4%. Domestic capacity will gain between 5.5% and 6.5%.

Last week, Delta guided toward current quarter unit revenue growth of between 2.5% and 4.5%, operating margins of between 18% and 20%, and a capacity gain of 2%. (Wall Street likes capacity gains to be minimal).

On the earnings call Wednesday, Kirby cited at least six reasons (including the narrowing margin gap) why investors should continue to believe in United's turnaround story.

  • He said Delta, the only other carrier to have issued current quarter guidance, benefits from comparison with the third quarter of 2016, when it "had a two-point hit to {revenue per available seat mile} from an IT meltdown and other issues."
  • He said United is paying a price in unit revenue because it has rolled out basic economy before American Airlines Group Inc. (AAL) - Get Report has, so in some cases American is selling standard coach seats at basic economy fares. "In the near term, we lose share because of that," he said.
  • Kirby said United is rolling out new markets, and new markets "aren't on day one RASM accretive - {after} a six- to 12-month ramp-up is where you get the full benefit."
  • He said United loses a point to a point and a half, compared with rivals, because its credit card deal with Chase is not as good as their deals with card vendors. He noted, however, that "American has a huge tailwind right now" due to its credit card deal with Citi, and that Andrew Nocella, who "led those efforts" at American, joined United in February. Nocella is now executive vice president and chief commercial officer. "I'm not sure when we will have the tailwinds that American and Delta have had, {but} we will get a much better result out of the card," Kirby said.
  • He said United is more dependent on Asia than competitors, and Asia is suffering from excess capacity. "When China is doing worse and domestic is doing better," United unit revenue will fall behind Delta, he said. Kirby added, "One quarter {China dominance} hurts you," he said. "In another, it helps you."

On Thursday morning, United shares fell 1%.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.