Fuel Prices To Weigh On United Airlines Stock In The Near Term

+61.06%
Upside
36.32
Market
58.50
Trefis
UAL: United Airlines Holdings logo
UAL
United Airlines Holdings

The shares of United Airlines (NASDAQ: UAL) observed a strong rally in recent weeks assisted by pent-up travel demand and declining coronavirus infections. However, the benchmark oil prices have surged by 26% from $75/bbl in early January to $95/bbl at present – weighing on the bottom line of all transportation companies. Per annual filings, aircraft fuel accounts for 22% of the total United Airlines’ operating expenditure – making it the second biggest cost head after salaries & wages. Given the company’s thin net margin of less than 10%, a sudden rise in fuel prices will weigh on earnings and subsequently shareholder returns in the near-term. Per the Trefis machine learning engine which analyses historical stock price movements, UAL stock has a 47% chance of a rise over the next month (21 trading days). See our analysis United Airlines Stock Chance of Rise for more details.

Five Days: UAL 9.7%, vs. S&P 500 -1.9%; Outperformed market (5% event probability)

  • UAL stock gained 9.7% over a five-day trading period ending 02/14/2022, compared to the broader market (S&P500) which declined 1.9% over the same period.
  • Returns of 9.7% or higher over a five-day period on 130 occasions out of 2517 (5%); Stock rose in the next five days in 65 of these 130 instances (50%).
Relevant Articles
  1. Is United Airlines Stock On The Move?
  2. Company Of The Day: United Airlines
  3. Will United Airlines Stock Rise After Recent Correction?
  4. Odds In Favor Of United Airlines Stock?
  5. Should You Buy United Airlines Stock Ahead Of Earnings?
  6. Will Domestic Travel Demand Assist United Airlines Stock?

Ten Days: UAL 15%, vs. S&P 500 -0.4%; Outperformed market (4% event probability)

  • UAL stock gained 15% over the last ten trading days (two weeks), compared to the broader market (S&P500) which declined 0.4%.
  • Returns of 15% or higher over 10-day period on 112 occasions out of 2517 (4%); Stock rose in the next 10 days in 63 of these 112 instances (56%).

Twenty-One Days: UAL 0.9%, vs. S&P 500 -6.5%; Outperformed market (50% event probability)

  • UAL stock gained 0.9% over the last twenty-one trading days (about one month), compared to the broader market (S&P500) which lost 6.5%.
  • Returns of 0.9% or higher over 21-day period on 1264 occasions out of 2516 (50%); Stock rose in the next 21 days in 592 of these 1264 instances (47%).

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

Returns Feb 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 UAL Return 10% 7% -36%
 S&P 500 Return -2% -7% 97%
 Trefis MS Portfolio Return 1% -9% 259%

[1] Month-to-date and year-to-date as of 2/14/2022
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market-Beating Portfolios

See all Trefis Price Estimates