United Airlines (UAL) shares soared 26.1% in the last trading session to close at $70.83. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 26.2% loss over the past four weeks.
The stock gained following President Donald Trump's announcement that he would pause the "reciprocal" import taxes for 90 days. The President said he felt the pause was needed because "more than 75 countries" had contacted his administration to make trade deals. Airline stocks were recently crushed by economic uncertainties and the resultant reduction in consumer and corporate confidence. The uncertainty hurt domestic air travel demand.
This airline is expected to post quarterly earnings of $0.79 per share in its upcoming report, which represents a year-over-year change of +626.7%. Revenues are expected to be $13.49 billion, up 7.6% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For United, the consensus EPS estimate for the quarter has been revised 6.5% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on UAL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
United belongs to the Zacks Transportation - Airline industry. Another stock from the same industry, Sun Country Airlines Holdings, Inc. (SNCY), closed the last trading session 21.6% higher at $11.65. Over the past month, SNCY has returned -27.6%.
For Sun Country Airlines
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United Airlines Holdings Inc (UAL): Free Stock Analysis Report Sun Country Airlines Holdings, Inc. (SNCY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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