United Airlines Takes Off on Analyst's Upgrade

United Airlines is rising after an Evercore ISI analyst upgrades the air carrier's rating to outperform from in-line.
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Shares of United Airlines (UAL) - Get Report were taking off Thursday, rising 1.5% to $89.43, after an Evercore ISI analyst upgraded the air carrier's rating to outperform from in-line.

Analyst Duane Pfennigwerth also increased his price target for the Chicago-based company to $125, up from $105.

A year ago, shares were trading at $84.18.

In a note to investors, Pfennigwerth said United trades at a "significant valuation" discount in comparison with its peers combined with a longer-term co-brand credit card economics improvement potential and an Evercore ISI view of improved global GDP growth in 2020.

Pfenningwerth said that United provides choices for higher long-term earnings growth potential for free, given the significant relative discount, and an improved credit card deal is no longer baked into expectations.

In October, the air carrier reported third-quarter earnings ahead of analysts' expectations and raised its full-year guidance.

United Air reported GAAP earnings of $3.99 a share against $3.05 in the year-earlier quarter. Shares outstanding fell 6.3% to 256.4 million.

The airline reported adjusted earnings of $4.07 a share against the FactSet-derived analyst estimate of $3.95.

Revenue came in at $11.38 billion against the estimate of $11.42 billion.

United raised its full-year 2019 adjusted EPS guidance to a range of $11.25 to $12.25 a share from its previous view of $10.50 to $12. Wall Street expects the company to report earnings of $11.85 a share for this year.

The company said its overcame cost pressures in the quarter. United also said it purchased $363 million of common shares in the quarter at an average price of $88.22 each.