United Airlines Stock Slips Despite Price-Target Hikes

The security still sports an over 54% year-over-year lead, though

Digital Content Manager
Jul 8, 2021 at 10:06 AM
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One stock in focus this morning as the travel industry attempts to recover from the Covid-19 pandemic is United Airlines Holdings Inc (NASDAQ:UAL). The security is down 3.4% at $48.60 at last check, despite receiving price-target hikes from Bernstein and Cowen and Company to $76 and $72, respectively. The latter forecast earnings misses for the flight sector, though, with the rising cost of  jet fuel not factored into current consensus estimates. In other news, United Airlines today unveiled a campaign featuring Team USA Olympic and Paralympic athletes that encourages Americans to pick up travel again.

Analyst sentiment towards Untied Airlines stock is still tepid at best. Of the 16 analysts covering the stock, nine carry a tepid "hold" or worse rating, while seven say "buy" or better. Meanwhile, the 12-month consensus target price of $62.33 is a 23.9% premium to last night's close.

The options pits are firmly bullish, on the other hand, with a fierce appetite for calls. This is per UAL's 50-day call/put volume ratio of 3.85 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the top percentile of its annual range.
Now surely seems like a great opportunity time to grab UAL options, which are incredibly affordable. The stock's Schaeffer's Volatility Index (SVI) of 42% sits in the 8th percentile of readings from the past 12 months, indicating options players are currently pricing in low volatility expectations.
United Airlines stock has lost some ground on the charts, slipping below the once-supportive 100-day moving average in June, after attempting a rally to its March 18, annual high of $63.69. Shares are now pacing for their fourth-straight loss, though UAL still boasts a 53.4% year-over-year lead.


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