United Continental (UAL) PT Raised to $142 at TD Cowen Following Strong Quarter

TD Cowen analyst Tom Fitzgerald raised the price target on United Continental (NASDAQ: UAL) to $142.00 (from $125.00) while maintaining a Buy rating.

The analyst said: "United has not yet scheduled its 4Q24 conference call, but we expect the company to report results AMC either on January 14, 2025, or January 21, 2025, with a call the following morning. Similar to Delta, we believe United had a strong quarter and capitalized on ebullient international demand and favorable domestic supply dynamics. We forecast 4Q24 adjusted EPS of $2.99 vs Bloomberg consensus of $2.95. We model revenue and related KPIs above consensus and expect an adjusted EBIT margin of 10.4% vs Street of 9.9%.

We revise our estimates for 2025 and 2026 higher due to pricing momentum, fuel, and United's idiosyncratic tailwinds. Further, consensus estimates for 2025 and 2026 assume an average fuel price per gallon of $2.53 and $2.54, respectively. We believe fuel is likely about 10 cents lower next year and believe the company's operating margin will widen by almost 200bps in 2025. We assume RASM growth of 1.7% and CASMex growth of 1.8%.

We raise our price target to $142, or ~10.4x our 2025 adjusted EPS estimate. United is our Best Idea for 2025."

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