Regarding airline stocks, United Airlines UAL is among the crème of the crop thanks to its strong operational and financial performance.
To that point, UAL shares have soared over +170% in the last year to impressively top Delta Air Lines DAL +78%, with American Airlines AAL and Southwest Airlines LUV sitting on gains of +34% and +6%, respectively.
That said, investors are surely wondering if United’s stock can fly higher as its Q4 earnings approach after-market hours on Tuesday, January 21.
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United Airlines Q4 Expectations
Based on Zacks estimates, United’s Q4 sales are thought to have increased 5% to $14.39 billion compared to $13.63 billion in the comparative quarter. More impressive, Q4 earnings are expected to climb 50% to $3.01 per share versus EPS of $2.00 a year ago.
Notably, the Zacks ESP (Expected Surprise Prediction) indicates United could once again surpass earnings expectations with the Most Accurate Estimate having Q4 EPS pegged at $3.06 and more than 1% above the Zacks Consensus.
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United has exceeded the Zacks EPS Consensus for nine consecutive quarters, posting a very impressive average earnings surprise of 26.91% in its last four quarterly reports.
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FY25 Outlook & EPS Revisions
Rounding out fiscal 2024, United’s total sales are thought to have increased 5% to $56.77 billion with annual earnings expected to rise 3% to $10.34 per share.
Looking ahead, FY25 sales are projected to expand another 6% to $60.46 billion. Even better, United’s bottom line is expected to expand over 20% this year with FY25 EPS projections at $12.56.
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Reassuringly, FY24 and FY25 EPS estimates have continued to trend higher over the last 90 days and are nicely up in the last week.
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Monitoring United’s Valuation
Despite what has been a monstrous rally to over $100 a share, UAL still trades at just 8.5X forward earnings. Offering a significant discount to the benchmark S&P 500’s 22.4X, UAL is on par with American and Delta’s P/E valuation and well beneath Southwest’s 20.3X.
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Bottom Line
Ahead of its Q4 report, United Airlines stock sports a Zacks Rank #1 (Strong Buy). Leading the extended post-pandemic rebound in airline stocks, the trend of positive earnings estimate revisions is a great sign that UAL could fly higher if United can post strong Q4 results as the Zacks ESP suggests.
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Today, See These 5 Potential Home Runs >>United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
Southwest Airlines Co. (LUV) : Free Stock Analysis Report
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
