Is United Airlines (UAL) Poised to Outperform in 2026 Despite Rising Leverage?

The question of whether United Airlines (UAL) can outperform in 2026 despite its elevated leverage hinges on a delicate balance of broker optimism, revenue resilience, and loyalty-driven demand, all while navigating cost pressures and debt management challenges. Drawing from recent analyst reports, financial disclosures, and operational updates, this analysis evaluates the airline's positioning for the year ahead.

Broker Optimism: A Strong Buy Consensus

Broker optimism for UAL remains robust, with a "Buy" consensus rating from 16 Wall Street analysts in the past year, including 13 "Buy" and one "Strong Buy" recommendation according to analyst ratings. The average 12-month price target stands at $128.27, but recent updates in late 2025 have pushed this higher, with Wells Fargo, UBS, and TD Cowen setting targets of $145.00, $142.00, and $138.00, respectively according to price targets. Analysts cite UAL's exposure to rebounding international and long-haul travel, as well as operational efficiency gains, as key drivers of this optimism as research shows. For instance, Citi analyst John Godyn raised its price target to $153, citing improved Q4 earnings expectations and a bottoming-out business travel barometer according to a recent report. Such upgrades suggest confidence in UAL's ability to capitalize on macroeconomic tailwinds, even as leverage concerns persist.

Revenue Resilience: Loyalty as a Strategic Anchor

UAL's revenue resilience in 2025 has been underpinned by its MileagePlus loyalty program, which contributed to a 9% year-over-year increase in loyalty revenue in Q3 2025 according to Q3 financials. This growth is not merely a function of volume but reflects strategic investments in customer experience, including $1 billion allocated to enhancements like seatback screens, Starlink Wi-Fi, and premium food offerings as reported. These initiatives have bolstered brand loyalty, with UAL reporting its highest customer satisfaction rate since 2022 according to customer data. The airline's partnership with JetBlue to expand reward redemption options further strengthens the value proposition for frequent flyers according to company news. Analysts note that loyalty revenue now accounts for a significant portion of UAL's diversified income streams, providing a buffer against economic volatility as financial reports indicate.

Cost Management: Operational Efficiency Gains

Cost management has been a focal point for UAL in Q4 2025, with cost per available seat mile (CASM) declining by 2.8% year-over-year and CASM-ex (excluding special items) dropping by 0.9% according to operational data. These improvements stem from disciplined labor cost management-driven by the timing of union contracts-and operational efficiencies, such as reduced flight cancellations and higher on-time departure rates as reported. Fuel costs, a critical expense for airlines, have also stabilized, with an average price of $2.43 per gallon in Q4 2025 according to fuel data. While UAL's net debt/EBITDA ratio remains elevated at 3.34x, analysts highlight that this represents an improvement from previous years and is supported by a $16.3 billion liquidity buffer as financial analysis shows.

Debt Reduction Progress: A Gradual Path to Stability

UAL has made measurable progress in deleveraging its balance sheet, with trailing twelve months net leverage falling to 2.1x from 2.4x earlier in 2025 according to financial reports. Key steps include repaying high-cost pandemic-era debt, such as the full $1.5 billion MileagePlus bonds as reported, and repurchasing $612 million of shares year-to-date through Q3 2025 according to company updates. These actions signal a commitment to optimizing capital structure, though challenges remain. Total debt and obligations still stand at $25.4 billion according to financial disclosures, and analysts caution that UAL's exposure to fuel volatility and labor negotiations could test its financial flexibility. However, the airline's Q4 2025 earnings report, expected in early January 2026, will provide critical insights into its ability to balance growth investments with debt reduction as noted by financial analysts.

The Outlook: Balancing Risks and Rewards

While UAL's leverage profile remains a concern, its strategic focus on loyalty-driven demand, cost efficiency, and disciplined debt management positions it to outperform in 2026. Broker optimism is justified by the airline's ability to generate resilient revenue streams and execute its United Next growth plan, which includes fleet modernization and premium yield expansion as outlined in company materials. However, investors must remain cautious about near-term risks, such as potential fuel price spikes or labor disputes, which could strain cash flow.

In conclusion, UAL's path to outperformance in 2026 is plausible but contingent on its ability to sustain operational improvements and deleveraging momentum. For now, the combination of strong analyst ratings, loyalty program strength, and cost discipline provides a compelling case for cautious optimism.