Today we're going to take a closer look at Large-Cap Consumer Discretionary company United Airlines, whose shares are currently trading at $97.02. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
United Airlines Is Trading Near Its Fair Value:
United Airlines Holdings, Inc., through its subsidiaries, provides air transportation services in the United States, Canada, Atlantic, the Pacific, and Latin America. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 20.93 and an average price to book (P/B) ratio of 2.93. In contrast, United Airlines has a trailing 12 month P/E ratio of 9.7 and a P/B ratio of 2.35.
United Airlines has moved 61.8% over the last year compared to 17.2% for the S&P 500 — a difference of 44.6%. United Airlines has a 52 week high of $116.0 and a 52 week low of $52.0.
The Firm Has a Declining EPS Growth Trend:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $43,259 | $15,355 | $24,634 | $44,955 | $53,717 | $57,063 |
| Operating Margins | 10% | -41% | -4% | 5% | 8% | 9% |
| Net Margins | 7% | -46% | -8% | 2% | 5% | 6% |
| Net Income (M) | $3,009 | -$7,069 | -$1,964 | $737 | $2,618 | $3,149 |
| Net Interest Expense (M) | $731 | $1,063 | $1,657 | $1,778 | $1,956 | $1,494 |
| Depreciation & Amort. (M) | $2,288 | $2,488 | $2,485 | $2,456 | $2,671 | $2,928 |
| Diluted Shares (M) | 260 | 279 | 322 | 330 | 332 | 333 |
| Earnings Per Share | $11.58 | -$25.3 | -$6.1 | $2.23 | $7.89 | $9.45 |
| EPS Growth | n/a | -318.48% | 75.89% | 136.56% | 253.81% | 19.77% |
| Avg. Price | $86.83 | $42.65 | $49.43 | $43.35 | $41.26 | $97.07 |
| P/E Ratio | 7.47 | -1.69 | -8.1 | 19.18 | 5.17 | 10.13 |
| Free Cash Flow (M) | $2,381 | -$5,860 | -$40 | $1,247 | -$260 | $3,830 |
| CAPEX (M) | $4,528 | $1,727 | $2,107 | $4,819 | $7,171 | $5,615 |
| EV / EBITDA | 5.3 | -6.73 | 21.07 | 7.95 | 5.65 | 6.45 |
| Total Debt (M) | $14,552 | $26,747 | $33,363 | $31,194 | $31,431 | $28,656 |
| Net Debt / EBITDA | 1.79 | -4.0 | 10.31 | 5.01 | 3.69 | 2.48 |
| Current Ratio | 0.55 | 1.16 | 1.19 | 1.0 | 0.83 | 0.81 |
United Airlines has growing revenues and increasing reinvestment in the business, generally positive cash flows, and healthy leverage levels. However, the firm suffers from declining EPS growth and not enough current assets to cover current liabilities because its current ratio is 0.81. Finally, we note that United Airlines has decent operating margins with a stable trend.
