NEW YORK (TheStreet) --Our last update on United Continental (UAL) - Get Report was October 22 when we said, "We look for the $50 support level in UAL to hold, but we don't expect to leave the gate until prices can clear their September highs around $62 and volume can expand on days when UAL closes higher."
UAL has delivered technically in the chart above. Prices are pushing up through the September highs, the On-Balance-Volume (OBV) line is edging higher and prices are back above the 50-day simple moving average.
The longer-term chart of UAL, above, shows the stock poised to move higher. Prices are back above the 40-week (aka 200-day) moving average, the OBV line is inching up and the Moving Average Convergence Divergence oscillator is almost back to the zero line after a sojourn lower. We look for UAL to grind up toward $70 in the next three months.
TheStreet Ratings team rates UNITED CONTINENTAL HLDGS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate UNITED CONTINENTAL HLDGS INC (UAL) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and attractive valuation levels. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- 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 two years. We feel that this trend should continue. During the past fiscal year, UNITED CONTINENTAL HLDGS INC increased its bottom line by earning $2.79 versus $1.30 in the prior year. This year, the market expects an improvement in earnings ($11.99 versus $2.79).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Airlines industry. The net income increased by 421.2% when compared to the same quarter one year prior, rising from $924.00 million to $4,816.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Airlines industry and the overall market, UNITED CONTINENTAL HLDGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: UAL