United Airlines Holdings Inc.

United Airlines Holdings Inc. (NASDAQ: UAL) is a holding corporation with United Airlines, Inc. as its sole subsidiary (United). It carries people and freight throughout North America and to Asian, European, African, Pacific, Middle Eastern, and Latin American locations.

Key Highlights and updates

• The United Aviate Academy was officially launched, with the purpose of teaching 5,000 new pilots by 2030. United is the only major U.S. airline with its own flight school, and the historic first pilot class is made up of 80% women and people of minorities.
• United Airlines Ventures and Oxy Low Carbon Ventures have invested in Cemvita Factory, a biotech startup, to commercialize the manufacturing of Sustainable Aviation Fuel, which will be produced utilizing a breakthrough new CO2 and synthetic microorganisms’ technology.
• Customers at United's U.S. hubs may now use a free "bag drop shortcut" to avoid the wait, check their luggage in a minute or less on average, and get to their aircraft.
• Subject to regulatory clearance, the airline announced intentions to increase service to one of the world's most popular holiday destinations by operating three nonstop flights per week, year-round, between New York/Newark and Cape Town International Airport.
• Berlin, Edinburgh, Scotland; Grand Cayman, Cayman Islands; Porto, Portugal; Singapore; and Shannon, Ireland reopened 19 international routes and restarted service to six places that had not been serviced since the outbreak began.
• With the addition of San Francisco International Airport and Los Angeles International Airport, we have completed all United Polaris lounge re-openings.
• United Airlines reported first-quarter 2022 financial results on April 20, 2022, and said it expects to return to profitability in the second quarter thanks to a strong operating revenue outlook, including total revenue per available seat mile (TRASM) growth of approximately 17% over 2019, the company's strongest second-quarter revenue guidance in history.

Important financials from the Q1 FY22 results

• Total operating revenue for the first quarter of 2022 was USD 7.6 billion, down 21% from the first quarter of 2019, while TRASM for the first quarter of 2022 was down 3% from the first quarter of 2019.
• Reported a 19% decrease in capacity in the first quarter of 2022 compared to the first quarter of 2019, as well as a USD 1.4 billion net loss, adjusted net loss of USD 1.4 billion in the first quarter of 2022.
• Reported a USD 1.4 billion operating loss in the first quarter of 2022, with an adjusted operating loss of USD 1.4 billion, and a negative 23.2 percent pre-tax margin in the first quarter of 2022, with a negative 23.2 percent adjusted pre-tax margin.
• Cash and cash equivalents for the quarter ending March 31, 2022, were USD 18.47 billion while the balance was USD 28.28 billion as of December 31. 2022. Furthermore, Long term debt for the company decreased from USD 30.36 billion to levels of USD 29.66 billion as of March 31, 2022.

Stock recommendation

UAL's stock price has gained 44.20% in the past three months and is currently in the middle of its 52-week range of USD 30.54 to USD 58.12.  As can be seen in the chart below, the price is currently below the short-term (50-day) SMA and long-term (200-day) SMA, with bullish movement that can be expected once the price breaks both the SMAs with good volume.

Given the stock's considerable bullish momentum over the past three months, financial results, and technical analysis, we propose a "Watch" rating on the stock at its current price of USD 44.79, up 0.81% as of June 06, 2022, at 07:55 AM PDT, with further analysis when the price breaks both the SMAs.

One Year Technical Chart, as of June 06, 2022, at 07:55 AM PDT. Data Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary

* Entry price as of June 06, 2022, at 07:55 AM PDT.

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.