Jefferies raised its price target on United Airlines to $142 from $134, maintaining a Buy rating after the airline reported third-quarter earnings per share of $2.54, which topped the midpoint of its $2.50 to $3.50 guidance range.
United Airlines reported record quarterly revenue of $17.88 billion in the third quarter, a 17.4% year-over-year increase, though the company narrowly missed Wall Street's earnings forecast of $2.58 per share. The airline issued fourth-quarter earnings guidance of $0.50 to $1.50 per share.
Jefferies noted that third-quarter results absorbed a 21-cent-per-gallon fuel headwind. The firm said fourth-quarter guidance reflects accelerating revenue per available seat mile against higher fuel costs of approximately $4.80 per gallon.
The airline is deploying Starlink connectivity, with 50% of the rollout complete and full deployment expected by year-end 2027. Jefferies said United Airlines continues to attract brand-loyal customers.
Jefferies estimates United Airlines could achieve double-digit pre-tax margins of 7.6% in 2027 if one of three conditions occurs: lower fuel costs, lower industry capacity, or continued industry trading of passenger loads for yields. The $33.9 billion company currently trades at a P/E ratio of 9.79, which Investing.com identifies as a low earnings multiple for the sector.
Wall Street analysts set a high target of $203 for United Airlines stock, though Investing.com analysis suggests the shares are currently overvalued relative to its Fair Value estimate. The market reacted positively to the company's stronger pricing power and optimistic long-term outlook, focusing on revenue growth and future potential despite the minor earnings miss.