United Airlines (UAL) Falls More Steeply Than Broader Market: What Investors Need to Know

United Airlines (UAL) ended the recent trading session at $86.53, demonstrating a -4.58% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 1.52% for the day. Meanwhile, the Dow lost 1.56%, and the Nasdaq, a tech-heavy index, lost 1.78%.

Prior to today's trading, shares of the airline had lost 20.41% lagged the Transportation sector's loss of 7.21% and the S&P 500's loss of 2.25%.

The upcoming earnings release of United Airlines will be of great interest to investors. It is anticipated that the company will report an EPS of $1.24, marking a 36.26% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $14.14 billion, showing a 7.02% escalation compared to the year-ago quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $12.91 per share and a revenue of $63.78 billion, indicating changes of +21.56% and +7.97%, respectively, from the former year.

Investors should also take note of any recent adjustments to analyst estimates for United Airlines. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 3.22% lower. Currently, United Airlines is carrying a Zacks Rank of #3 (Hold).

In the context of valuation, United Airlines is at present trading with a Forward P/E ratio of 7.02. Its industry sports an average Forward P/E of 8.36, so one might conclude that United Airlines is trading at a discount comparatively.

We can additionally observe that UAL currently boasts a PEG ratio of 0.46. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Transportation - Airline stocks are, on average, holding a PEG ratio of 0.47 based on yesterday's closing prices.

The Transportation - Airline industry is part of the Transportation sector. This group has a Zacks Industry Rank of 41, putting it in the top 17% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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