Why Do We Think United Continental Is Worth $68 Per Share?

by Trefis Team
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Trefis
UAL
United Airline Holdings
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United Continental, similar to its competitors, has been flying high on the ongoing oil slump. Its EBITDA margins have improved significantly due to the lower fuel costs over the last 20 months. However, the currency fluctuations throughout 2015 created pressure on the airline’s top line growth. Also, the frequent changes in the airline’s top management caused anxiety among investors. Considering all these factors, we expect the legacy carrier to do well in the near term, as the outlook for commodity markets remains weak. Further, the network carrier aims to focus its capacity in high-margin and unexplored markets, which is likely to boost its revenue, despite currency headwinds in the near term. Thus, we have a price estimate of $68 per share for United Continental, which is roughly 19% ahead of its current market price.

UAL-Q&A11-7

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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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