Here’s Why We Have Revised United Continental’s Price Estimate To $52 Per Share
United Continental (NYSE:UAL), one of the legacy carriers in the US, has dropped more than 25% over the last three months due to its disappointing financial results for the March quarter of 2016. The airline reported a decline in its net earnings in the first quarter, despite its competitors posting extraordinary growth in earnings on the back of lower fuel costs. In addition, the company has downwardly revised its capacity growth target for 2016 from 1.5%-2.5% to 1%-2%, largely to streamline its operations and weather the currency headwinds. Further, the Chicago-based airline also increased its fuel cost guidance from $1.25-$1.30 per gallon to $1.40-$1.45 for the full year, due to the faster-than-expected recovery in crude oil prices over the last couple of months. Finally, the network carrier has raised its 2016 capital expenditure guidance to $3.1-$3.3 billion, $400 million higher than its previous target. Based on these factors, we have revised our price estimate for United Continental to $52 per share.
Have more questions about United Continental (NYSE:UAL)? See the links below:
- How Will Lower Fuel Costs Impact The Aircraft Re-Fleeting Program Of Large US Airlines?
- How Have Mergers And Acquisitions Led To The Consolidation Of The US Airline Industry Over The Last Decade?
- Lower Unit Revenue And Higher Tax Expense Caused United Continental’s 1Q’16 Earnings To Drop Despite Fuel Cost Savings
- Currency Headwinds To Offset United Continental’s Fuel Cost Savings For 1Q’16
- How Will United’s Equity Value Be Impacted If The Crude Oil Prices Rebound To $100 Per Barrel By 2018?
- How Will United’s Equity Value Be Impacted If The Crude Oil Prices Average At $50 Per Barrel In 2018?
- How Will United’s Revenue And EBITDA Grow Over The Next Five Years?
- How Important Is United’s International Division For Its Overall Equity Value?
- What Is United’s Fundamental Value Based On 2016 Estimated Numbers?
- Why We Think United Continental Is Worth $65 Per Share?
- What Drove United’s Revenue And EBITDA Growth Over The Last Five Years?
- How Has United’s Revenue And EBITDA Composition Changed Over The Last Five Years?
- What Is United Continental’s Revenue And EBITDA Breakdown?
- How Has United Continental Utilized Its Cash Flows Over The Last Three Years?
- How Have Plummeting Crude Oil Prices Impacted United Continental’s Operating Margin?
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- Down 13% Last Week, Can United Airlines Holdings Stock Bounce Back?
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- Will United Airlines Stock Rise After Recent Correction?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for United Continental
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