Is United Airlines stock a Buy after positive earnings?

United Airlines stock (NASDAQ:UAL) beat analysts expectations in the second quarter earnings, netting revenue of $5.47 Billion. The airline reported an EPS of -$3.91 per share which also beat the consensus of -$4.01 per-share.

However the stock remained stagnant after the earnings beat as investors continue to weigh-in the risk of the Delta variant on Airline operations.

UAL stock is currently down 13% for the month. Nevertheless, UAL stock maintains a Bullish sentiment on Wallstreet with an average price target representing an upside of 17.40%.

Wallstreet backs UAL stock forecast

Firstly, across the board of 18 Wallstreet analysts, the average price target currently stands at $56.29 a share. Interestingly, from targets released in this quarter only, the average target is bolstered up to $63.33 a share (32% upside).

In comparison to other Airlines listed on the US market, UAL maintains the second highest average upside from analyst targets. American Airlines (NYSE:AAL) currently has an average downside of 12.77% while Delta Airlines (NNYSE:DAL) maintains an impressive 24.09% upside.

Kiev, Ukraine, June 28, 2021

United Airlines beats Q2 earnings expectations

The companies positive Q2 earnings exceeded analyst expectations “as international long haul and business travel accelerated even faster than anticipated”. The company saw a spike in passenger revenue, growing to $4.366 Billion for the quarter.

In particular, International passenger revenue rose by 675% YOY to $1,078 Billion. United Airlines expects passenger revenue to reach a full recovery by 2023.

However, the company is still netting an adjusted loss of $1.3 Billion which may concern some risk averted investors. The main focus for the company will be on continuing to drive demand back into the industry.

Interestingly, United Airlines expects Q3 capacity to be up 39% in comparison to this quarter suggesting an improving United Airlines bottom line.

The bottom line – UAL stock

In summary, the outlook for UAL stock is improving with a full scale return on demand expected by 2023. The improving passenger revenue is a positive sign for investors however it will take some time for customers to regain confidence.

Nevertheless, a Q2 earnings beat alongside positive Wallstreet coverage is always a positive for investors to take away.

The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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