In the past week, sector heavyweight United Airlines Holdings Inc (NASDAQ: UAL) reported
earnings for second-quarter 2023. Results were aided by upbeat air travel
demand and declining fuel costs. Driven by the upbeat air-travel demand
scenario, UAL lifted its earnings per share view for the current year.
United Airlines reported second-quarter
2023 earnings per share of $5.03, which outpaced the Consensus Estimate of
$3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat
the Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1%
year over year due to upbeat air travel demand. The year-over-year increase in
the top line was driven by a 20.1% rise in passenger revenues. UAL expects 2023
earnings per share in the band of $11-$12 (prior view: $10-$12).
Why the UAL Weekly
Options Trade was Executed?…..
Since the beginning
of the year, airline stocks have signaled the industry is recovering from the
Covid pandemic. Earnings reports suggest airlines are getting back to
pre-pandemic levels, with air carriers seeing strong demand for air travel.
So far in 2023, the
number of people traveling by airplane is on par with pre-pandemic levels,
according to Transportation Security Administration data. As people return to
the skies, airline stocks are also taking off.
United Airlines Holdings Inc (NASDAQ: UAL) has advanced 48% on the year.
Also, United Airlines hit a new 52-week high during
mid-day trading last Thursday after Argus raised their price target on the
stock from $58.00 to $65.00.
As well, United Airlines will report its Q2 2023 results on Wednesday, July
And, UAL shares moved higher pre-market after reaching a
weekend labor agreement with pilots that includes significant wage increases.
The UAL Weekly
Options Trade Explained.....
** OPTION TRADE: Buy UAL AUG 11 2023 55.000 CALLS - price at last close was $1.60 - adjust accordingly.
Obviously the results will vary from trader to trader
depending on entry cost and exit price that was undertaken.
Entered the UAL Weekly Options (CALL) Trade on Monday, July
17, 2023, for $1.92.
Sold the UAL Weekly Options contracts on Friday, July 21, 2023, for $4.00; a
potential profit of 108%.
Don’t miss out on further trades – become a
Further Catalysts for the UAL Weekly Options Trade…..
Airlines is confirmed to report earnings on Wednesday, July 19, 2023 at
approximately 4:05 PM ET. And, an earnings beat is expected!
consensus earnings estimate is $3.99 per share on revenue of $13.93 billion,
representing 15.0% year-over-year revenue growth, but the Whisper number is
higher at $4.26 per share. The company's guidance was for earnings of $3.50 to
$4.00 per share.
earnings estimates have been revised higher since the company's last earnings
will likely continue to benefit from the robust travel demand. It should see a
continued rise in total available seat miles, and the passenger load factor
will likely remain strong. However, it will be a tough comparison with the
prior-year quarter, which saw a record travel demand. The average ticket price
has also cooled this year while overall capacity has expanded. Looking at Q1
2023, United Airlines’ revenues were up 51%, led by a 62% rise in passenger
revenue. While the ASMs were up 23% in Q1, passenger revenue per available seat
mile surged 31% to 15.63 cents.
the bottom line, United Airlines reported a $0.63 loss per share on an adjusted
basis in Q1, compared to a $4.24 loss per share in the prior-year quarter. The
average fuel price for the company stood at $3.33 in Q1, and it should be lower
in Q2 vs. its prior-year figure of $4.18. The average U.S. Gulf Coast Kerosene
Jet fuel price per gallon fell from $3.90 (end of June last year) to $2.20 now.
Now that fuel prices have cooled compared to last year, the company will likely
see a positive operating margin and earnings. It has guided for $3.50 to $4.00
earnings in Q2.
Airlines shares moved higher in pre-market trading after the carrier reached a
weekend labor agreement with pilots that includes significant wage
Line Pilots Association, which rejected a contract offer from United last year
that would have given its 14,000 members a 14.5% pay increase, said the weekend
agreement -- which still needs to be ratified -- will lead to pay increases of
between 34.5% and 40.2% over the next four years.
follows a similar agreement between Delta Air Lines DAL and its pilots' union
earlier this year and just ahead of United's second quarter earnings later this
pleased to have reached an agreement with ALPA," said CEO Scott Kirby.
"The four-year agreement, once ratified, will deliver a meaningful pay
raise and quality of life improvements for our pilots while putting the airline
on track to achieve the incredible potential of our United Next strategy.
to the issued ratings of 13 analysts in the last year, the consensus rating for
United Airlines stock is Moderate Buy based on the current 1 sell rating, 3
hold ratings and 9 buy ratings for UAL. The average twelve-month price
prediction for United Airlines is $59.20 with a high price target of $80.00 and
a low price target of $35.00.
United Airlines has a current ratio
of 0.91, a quick ratio of 0.86 and a debt-to-equity ratio of 4.13. The company
has a market capitalization of $17.49 billion, a price-to-earnings ratio of
9.16 and a beta of 1.44. The company has a fifty day moving average of $52.28
and a 200-day moving average of $47.66.