Key Morningstar Metrics for United Airlines Holdings
What We Thought of United Airlines Holdings’ Earnings
United Airlines Holdings UAL reported final 2023 results closely in line with our previous expectations. Management’s discussion focused on a few industry trends that we believe the firm is positioned to benefit from. We’ve extended the time frame in which United will likely be able to maintain high-single-digit operating margins, and we have raised our fair value estimate of its stock to $38 from $35 per share.
In the drawn-out aftermath of the COVID-19 pandemic’s industrial disruption, two capacity constraints are keeping airlines’ unit revenue and profitability elevated. First, insufficient staffing of Federal Aviation Administration air traffic controllers has led the agency to cap the number of daily flights it allows into the busiest hubs, like New York and San Francisco, which allows United and its competitors to maximize yields in those markets rather than…