Shares of United Airlines (UAL, Financial) experienced a significant drop of 11.41%, coinciding with the release of Delta Air Lines' (DAL) earnings report. This movement suggests investor concern over potential challenges that UAL might face, as highlighted by the disappointing financial performance of a key competitor.
United Airlines plans to release its first-quarter 2025 earnings on April 16. The recent developments from Delta's report, particularly the discussed global trade uncertainties affecting travel demand, could foreshadow similar challenges for UAL. Both airlines have previously indicated that tariffs might impact bookings, further adding to these concerns.
In terms of financial evaluation, United Airlines (UAL, Financial) has been assessed as "Fairly Valued" with a GF Value estimate of $58.54. Despite the current market turbulence, UAL maintains a robust Piotroski F-Score of 7, indicating a financially healthy business. The stock's Price-to-Earnings (P/E) ratio stands at 6.65, which is relatively low, suggesting potential undervaluation when compared to industry averages.
Despite this valuation headwind, UAL does have some strengths. The company's Beneish M-Score of -2.77 suggests that financial manipulation is unlikely. Furthermore, UAL has a market capitalization of $20.54 billion, supported by a tangible book value per share of $16.67. However, the Altman Z-Score of 1.3 places UAL in the distress zone, highlighting a risk of financial instability within the next two years
Looking towards growth, United Airlines' EBITDA growth of 8.1% over the past year is a positive aspect, aligned with an increase in revenue per share. Yet, with market uncertainties continuing to cloud the industry, UAL's future performance in international, premium, and loyalty-based revenue segments could be crucial for sustained recovery.
