Why United Airlines Holdings, Inc. (UAL) Remains A Buy According To Bernstein

United Airlines Holdings, Inc. (NASDAQ:UAL) is among the stocks Wall Street analysts are watching closely. On November 20, David Vernon, an analyst at Bernstein, reaffirmed the ‘Buy’ rating on United Airlines Holdings, Inc. (NASDAQ:UAL) with a price target of $123, suggesting an upside of nearly 36%. Earlier, on November 12, the company witnessed an upgrade from Moody’s Ratings. While the corporate family rating (CFR) for the company was increased to Ba1 from Ba2, the backed senior secured rating was raised to Baa3 from Ba1. Not only that, the company’s 18 tranches of Enhanced Equipment Trust Certificates were elevated, with the remaining two holding steady.

The rating agency highlighted the company’s improved operating performance across all of its revenue sources, particularly in premium cabin, basic economy, loyalty, and cargo services. According to Moody’s, United Airlines Holdings, Inc. (NASDAQ:UAL) is in a good position to surpass $63 billion in revenue in 2026, with operating profit to be at least $5.5 billion.

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Even with heavier capex lined up for the next year, the agency forecasts free cash flow to be over $1.5 billion. As long as United Airlines Holdings, Inc. (NASDAQ:UAL) effectively shifts its capital structure to unsecured debt, with debt/EBITDA reaching 2.5x, the rating could be uplifted even further, Moody’s Ratings says.

United Airlines Holdings, Inc. (NASDAQ:UAL) is an Illinois-based provider of air transportation services through its subsidiaries. Founded in 1968, the company also engages in ground handling, flight academy, and maintenance services for external parties.

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Disclosure: None.