Analyst Sees New Highs on the Horizon For Airline Stock

UBS glowed about United's cost management profile

by Patrick Martin

Published on Nov 13, 2019 at 9:55 AM

The shares of United Continental Holdings Inc (NASDAQ:UAL) are trading at $92.71 this morning, after UBS initiated coverage on the airliner with a "buy" rating and $110 price target. The analyst in coverage glowed about the company's cost management profile in comparison to sector peers

UAL is now trading within a chip-shot of its Dec. 3 record high of $97.85. It's been a turbulent 2019 for the airline stock, with the $81 level emerging as a solid floor in the last three months. Since its last test of that region in early October, the security has tacked on 14%. 

Recent options traders have made calls quite popular lately. Specifically, the 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 1.89 and ranks in the 86th annual percentile.

In the wake of UAL's earnings report last month, implied volatility levels have imploded, making near-term options attractively priced at the moment. The stock's Schaeffer's Volatility Index (SVI) of 22% sits in just the 7th percentile of its annual range, meaning now is an opportune time to speculate on the equity's short-term trajectory with options.

What's more, UAL had been an attractive target for premium buyers over the last 12 months. This was per its elevated Schaeffer's Volatility Scorecard (SVS) reading of 88 (out of 100).


A Schaeffer's exclusive

11 Stocks to Buy Before Leap Day

Access your FREE insider report before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


The Latest Investor's Guide to Precious Metals
Learn how to protect savings and maximize returns by investing in precious metals.
March Kicks Off with Nonfarm Payrolls, Retail Earnings
Several retail names, including Target, will close out a wild earnings season
Etsy Stock Scores After Substantial Earnings Beat
An exodus of short sellers could fuel more tailwinds
The Latest Investor's Guide to Precious Metals
Learn how to protect savings and maximize returns by investing in precious metals.