Schaeffer's Top Stock Picks for '25

United Airlines Stock Looks Ripe for Bear Notes

UAL is now in the red for March, but remains higher in 2024

Digital Content Manager
Mar 25, 2024 at 9:36 AM
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In a move that feels like a long time coming, the Federal Aviation Administration's (FAA) announced today it will initiate a formal evaluation of United Airlines Holdings Inc (NASDAQ:UAL) to determine whether or not it is complying with safety regulations. This follows a string of incidents, including an aircraft that was missing an external panel upon landing, a plane that rolled onto the grass, and another that lost a tire after takeoff. 

UAL is down 3.9% to trade at $44.51 out of the gate this morning, poised to erase its monthly gain of 2%. Nevertheless, the shares remain up 9% so far this year, and surged to their highest level since September in the previous session.

Analysts remain optimistic, with 15 of the 19 in coverage sporting a "buy" or better rating, while the 12-month consensus target price of $64.78 is a 43.2% premium to current levels. In other words, the security looks ripe for a round of downgrades and/or price-target cuts.

Short-term options traders, meanwhile, lean overwhelmingly bearish. This is per the stock's Schaeffer’s open interest ratio (SOIR) of 1.91 that sits in the 99th percentile of its 12-month range.

 
 

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