United Airlines Announces New President

The airline sector has been crippled due to the COVID-19 pandemic

by Jake Scott

Published on May 12, 2020 at 10:28 AM
Updated on Jun 24, 2020 at 10:16 AM

The shares of United Airlines Holdings Inc (NASDAQ:UAL) are down 1% to trade at $23.73, giving back electronic gains from the morning amid news Brett Hart was named the airliner's new president, effective May 20. Hart will replace Scott Kirby, who is slated to take over as CEO for Oscar Munoz next week. The C-suite shuffling comes as air travel demand suffocates the sector, prompting companies like United to pursue plans focused on survival, such as appointing an insider such as Hart.

A little over a week ago, Warren Buffett and Berkshire Hathaway (BRK.a) were waving goodbye to the airline sector. After trading as high as the $88 level in late January, United Airlines fell to its seven-year-low of $17.80 by March 18. Guiding the equity downward is its 40-day moving average, which stifled breakout attempts in the last two months. Year-to-date, UAL is now facing a 73% deficit. 

It's no surprise then that enthusiasm isn't too high for United Airlines Stock stock. Of the 11 analysts in coverage, seven sport a tepid "hold." However, the 12-month consensus target price of $36.29 is a whopping 50.5% premium to current levels. This could signal some price-target cuts in the near future, which could weigh on the shares.

In the options pits, UAL sports a 50-day put/call volume ratio of 0.97 at the International Securities Exchange (ISE), Cboe Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the slightly elevated 73rd percentile of its annual range. This suggests that although calls are outnumbering puts on an absolute basis, the appetite for long puts is healthier-than-usual lately. 


A Schaeffer's 39th Anniversary Exclusive!

8 Top Stock Picks for 2020

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


  
 
 

Partnercenter