United Airlines' weak current-quarter profit forecast, is overshadowing strong quarterly results
United Airlines Holdings Inc (NASDAQ:UAL) stock is dragging the airline sector today. Despite the company's better-than-expected third-quarter results, its weak current-quarter profit forecast has UAL down 8.6% to trade at $36.68, hitting its lowest levels in exactly a year. The report has sent sector peers Delta Air Lines (DAL) and American Airlines (AAL) 4.2% and 4.9% lower, respectively, as well. This bear gap also has United Airlines stock dropping into negative territory for 2023.
Analysts have yet to chime in on the results, though there is room enough for bear notes. Of the 16 analysts in coverage, 12 carry a "buy" or better rating, while the 12-month consensus price target of $61.60 is a roughly 68% premium to current levels.
So far today, 39,000 calls and 30,000 puts have been exchanged, which is eight times the options volume typically seen at this point. The March 30 put is the most popular, followed by the October 39 call, with new positions being opened at both.
Despite calls outnumbering puts on an absolute basis, the stock's 50-day put/call volume ratio of 0.75 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is in the elevated 92nd percentile of its annual range. This suggests a very healthy appetite for long puts of late.
Meanwhile, the security's Schaeffer's Volatility Scorecard (SVS) sits at a 93 out of 100, meaning UAL has exceeded option traders' volatility expectations during the past year.