Monitor This Key Chart Level for United Airlines Stock
United Airlines (UAL) saw a significant surge of more than 5% in extended trading on Tuesday following the airline’s impressive performance in surpassing analysts’ quarterly forecasts and providing better-than-expected current-quarter earnings guidance. This positive momentum comes despite the airline’s adjustment to its aircraft deliveries forecast from Boeing (BA).
Quarterly Performance Highlights
For the three months ending March 31, United Airlines reported an adjusted loss of 15 cents per share, significantly narrower than the 57-cents-a-share loss anticipated by analysts. The airline’s revenue for the period reached $12.54 billion, marking a nearly 10% increase from the previous year and exceeding the Street expectation of $12.45 billion.
The temporary grounding of Max 9 jets in January due to safety concerns resulted in a cost of approximately $200 million for United Airlines. The airline mentioned that it would have generated a profit in the quarter if not for the grounding of these planes.
Future Outlook and Guidance
Looking ahead, United Airlines provided a current-quarter earnings forecast ranging between $3.75 and $4.25 per share, with the midpoint of this range surpassing analysts’ expectations of $3.76 per share. The carrier also reiterated its full-year 2024 earnings forecast of between $9 and $11 per share.
To manage the uncertainty surrounding long-term plane deliveries, United Airlines plans to adjust its fleet plan to align with manufacturers’ delivery capabilities. This includes leasing Airbus A321neos from Airbus and converting a portion of its aircraft orders to better reflect market conditions.
Analyst Insights and Market Reaction
Analysts at Citi expressed relief following United Airlines’ better-than-expected results, highlighting the positive impact on investors amidst recent challenges faced by the airline. The company’s projected earnings-driven rally has sparked investor interest, with shares gaining 5.2% to $43.65 in after-hours trading on Tuesday.
Chart Analysis and Technical Levels
United Airlines’ stock price has been trading within a rising wedge pattern for several months, with recent movements breaking below the pattern earlier this month. Investors are advised to monitor if the stock can close above the wedge’s lower trendline, currently positioned around $43.85.
A close above this critical technical level could signal a bear trap scenario, potentially leading to short sellers being squeezed and driving further upside in the share price. This key chart level serves as an important indicator for potential future price movements.
Conclusion
United Airlines’ recent performance and outlook have generated positive momentum for the company, with investors closely monitoring key chart levels to gauge future price movements. The airline’s strategic adjustments and financial resilience in challenging circumstances position it favorably for potential growth and recovery in the market.
As always, investors should conduct thorough research and consider their risk tolerance before making any investment decisions based on the information provided.
The comments, opinions, and analyses expressed in this article are for informational purposes only. Readers are advised to refer to the original source for more detailed information.
Disclaimer: The author does not own any of the securities mentioned in this article as of the date of writing.
