Scott Kirby, the chief executive of United Airlines Holdings Inc. (NASDAQ: UAL), says that the shares have more than doubled in value this year.
At the time of writing, airline stocks were selling for 8 times their estimated future earnings.
In an interview with the CEO of the airline today, he said that this is attractive because “we and analysts both think we’ve had a multi-year streak of improving margins” and driving up EPS.
United Airlines does not pay dividends at the moment.
United Airlines is expecting a strong December
United Airlines has just experienced its highest-ever day of ticket sales and is expecting this to be “the best December ever.”
Scott Kirby, CEO of UAL, attributes the airline’s strength to the aggressive investments it has made since the Covid epidemic.
United Airlines invested around $40 billion in the wake of the recent health crisis. In 2025, it plans to spend another $500 million on a cutting-edge Inflight Training Centre at Dulles Airport.
United Airlines’ chief executive is expecting UAL to continue its rally in the future as it “doubles international service” over the next few years.
He added that the demand for United Airlines Holdings Inc. remains strong internationally.
Since its low, the stock of United Airlines has quadrupled.
What Trump 2.0 could mean for UAL
United Airlines is confident that its business will remain solid in the long haul, despite plans by some European airlines to add more transatlantic routes.
This is because CEO Kirby said on this morning’s “Squawk box” that “there are probably capacity constraints for a decade in the widebody industry”.
Scott Kirby believes that the FAA will receive more resources from the Trump Administration to upgrade the infrastructure, which could also benefit United Airlines stocks in the long run.
In October, UAL announced a solid third quarter. They also announced a stock repurchase program of $1.5 billion that has contributed to the current share price rise.
United Airlines wins the airline industry
According to CEO Scott Kirby, the pandemic caused a change in airline structure – it separated it into “a few winners and everyone else”.
United Airlines is, according to him, one of the latter.
Barclays’ analyst Brandon Oglenski is optimistic, as evidenced by his $150 price target. This suggests that UAL could rise another 55% in 2025.
Oglenski believes United Airlines will gain market share next year as the industry fundamentals improve, growth in capacity slows down, and moats get deeper for winners.
Air Canada expects to be able to earn $3.0 per share in the current quarter, compared to $2.0 last year. The consensus was $2.68.
The post United Airlines CEO Calls UAL ‘Attractive’ despite 140% Stock Surge in 2024 may be updated as new developments unfold.
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