United Continental (UAL) Stock Slides, Global Travel Advisory Weighs on Travel Sector - TheStreet

NEW YORK (TheStreet) -- United Continental Holdings (UAL) - Get Report stock is falling 3.21% to $56.68 in afternoon trading on Tuesday after the U.S. State Department issued a worldwide travel alert on Monday afternoon, causing an overall decline in the travel industry.

American Airlines Group (AAL) and Delta Air Lines (DAL) stocks are declining about 2% and 3%, respectively, while shares of online travel agencies Expedia (EXPE) and Priceline Group (PCLN) are trading lower by about 2%.

The alert warns U.S. citizens of the increased threats of terrorist attacks.

"Current information suggests that ISIL (aka Da'esh), al-Qa'ida, Boko Haram, and other terrorist groups continue to plan terrorist attacks in multiple regions," the State Department said in a statement announcing the alert, which will be in effect until February 24.

These extremist have attacked several targets, including concerts, such as the one in Paris on November 13, and aircrafts, including a Russian plane flying over Egypt last month.

United Continental, a Chicago-based airline carrier, operates domestic and international flights, including to Israel, the United Arab Emirates and Kuwait.

Separately, 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 a number of strengths, 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 notable return on equity, attractive valuation levels, expanding profit margins, impressive record of earnings per share growth and compelling growth in net income. 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:

  • 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 ($11.98 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.
  • 36.29% is the gross profit margin for UNITED CONTINENTAL HLDGS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 46.73% significantly outperformed against the industry average.
  • You can view the full analysis from the report here: UAL

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.