United Airlines (UAL, Financial) has experienced a significant stock decline of 3.53%, with its current price at $69.90. This drop comes amidst discussions from the J.P. Morgan 2025 Industrials Conference that outlined weaker expected market conditions in 2025.
The financial data provides a mixed outlook for UAL. The company's price-to-earnings (P/E) ratio stands at 7.41, suggesting that the stock is relatively undervalued compared to its peers. The PB ratio is at 1.81, indicating a price that is slightly above its tangible book value. Additionally, United Airlines has been assigned a GF Value rating of "Modestly Overvalued," with a GF Value estimate of $58.63. For more insights, investors can refer to the GF Value page for UAL.
United Airlines faces some warning signs, including an Altman Z-Score indicating financial distress with a possibility of bankruptcy in the next two years. Moreover, the company's revenue growth has slowed down over the past 12 months. Despite these challenges, United Airlines has shown positive signs, such as a high Piotroski F-Score of 7, reflecting a healthy financial situation.
The market capitalization of UAL is $22.88 billion, with a predicted decline in government-related business impacting revenue by 2% to 3%. Additionally, Delta Air Lines' recent revision of its revenue growth forecast to 4%, down from an initial 7% to 9%, has further pressured UAL as CEO Scott Kirby expects performance to hit the low end of their guidance range.
Despite these hurdles, United Airlines is focusing on increasing leisure bookings rather than government contracts. CEO Kirby does not foresee major capacity cuts before summer but anticipates possible discussions on capacity and supply changes by August. Looking forward, UAL's return on invested capital (ROIC) versus the weighted average cost of capital (WACC) implies challenges in capital efficiency, though the company maintains a Free Cash Flow yield of 16.74%.
