On Tuesday, TD (TSX:TD) Cowen revised its outlook on United Continental (NASDAQ:UAL), increasing the price target to $80 from the previous $65 while maintaining a Buy rating on the shares. The adjustment comes as the firm anticipates a robust performance in the upcoming second-quarter earnings report, slated for release after the market closes tomorrow.
The airline, which has been designated as TD Cowen's second Top Pick, is expected to report earnings per share (EPS) just shy of the midpoint forecast. Analysts at TD Cowen predict that United Continental will continue to build on the momentum from its UnitedNext initiatives, which have been central to the company's strategy.
Management at United Continental is anticipated to set the third-quarter adjusted EPS guidance in the range of $3.00 to $3.50. The focus for the upcoming earnings call is expected to be on several key areas, including gains in domestic market share, revenue per available seat mile (RASM) trends, cost per available seat mile excluding fuel (CASMex) performance, as well as updates on aircraft deliveries, capital expenditures (CAPEX), and improvements to the balance sheet.
The raised price target reflects the positive outlook TD Cowen holds on United Continental's operational and financial trajectory, as the airline industry continues to navigate the post-pandemic travel landscape. United Continental's forthcoming earnings report will provide investors with a clearer picture of the company's current performance and future prospects.
In other recent news, United Airlines Holdings (NASDAQ:UAL), Inc. and its subsidiary United Airlines, Inc. have made notable strides in financial management by fully repaying a $1.8 billion term loan. This move signifies an improvement in United's liquidity position and an ongoing effort to streamline its balance sheet. In terms of earnings, United Airlines' Q2 outlook remains stable, projecting earnings to be between $3.75 and $4.25 per share. Notably, Redburn-Atlantic and Jefferies have upgraded United Airlines' stock to Buy, citing stronger balance sheets compared to its peers and a positive future outlook.
In government-related news, the U.S. Treasury Department has raised $556.7 million from auctions of warrants in 11 major U.S. airlines, including United Airlines, as part of the government's COVID-19 relief efforts for the airline industry. Barclays (LON:BARC) has maintained a steady price target of $60.00 on United Airlines, highlighting the company's robust global network and expected continued benefits due to reduced competition in the wake of the pandemic. These are just a few of the recent developments concerning United Airlines.
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