United Airlines Faces Boeing MAX 9 Grounding's Negative Impact On Capacity Growth: Analyst
Portfolio Pulse from Nabaparna Bhattacharya
BofA Securities analyst Andrew G. Didora maintained a Buy rating on United Airlines Holdings, Inc. (UAL) and raised the price target to $60 from $56, despite concerns over Boeing's 737 MAX 9 grounding affecting UAL's capacity growth. United Airlines' shares rose by 5% after a strong Q4 earnings beat and positive 2024 EPS outlook. However, the company faces cost pressures from labor, maintenance, and the MAX 9 grounding. These pressures are expected to increase 2024 unit costs to +4.0% from the previously forecasted +2.2%. UAL shares were up 0.89% to $40.85.
January 24, 2024 | 7:58 pm
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POSITIVE IMPACT
BofA Securities analyst reiterates Buy rating on UAL and raises price target to $60, citing a strong Q4 earnings beat and positive 2024 outlook despite cost pressures.
The reiteration of a Buy rating and an increased price target by a BofA Securities analyst, combined with a strong Q4 performance and a positive outlook for 2024, are likely to have a positive short-term impact on UAL's stock price.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEUTRAL IMPACT
Delta Air Lines is mentioned in comparison to United Airlines, with similar regional trends in domestic and Atlantic flights, and negative trends in Pacific and Latin America.
Delta Air Lines is referenced for comparison purposes with no direct impact from the news on its stock. The mention does not provide specific information that would likely affect Delta's stock price in the short term.
CONFIDENCE 70
IMPORTANCE 40
RELEVANCE 50
NEGATIVE IMPACT
Boeing's 737 MAX 9 grounding is mentioned as a significant factor causing cost pressures and impacting capacity growth for United Airlines.
The grounding of Boeing's 737 MAX 9 is creating negative cost implications for United Airlines, which could indirectly affect Boeing's reputation and stock as it highlights ongoing issues with the aircraft model.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70