10 Best Airline Stocks To Buy According To Short Sellers

3. United Airlines Holdings, Inc. (NASDAQ:UAL)

% of shares shorted: 4.31%

Number of Hedge Fund Holders: 56

One of the Best Airline Stocks To Buy According To Short Sellers is United Airlines Holdings, Inc. (NASDAQ:UAL), which has its headquarters in Chicago, Illinois. Its United Airlines is the second-biggest airline in the world in terms of fleet size. The airline company is a renowned international carrier with a long history of aviation in the Americas, having been founded in April 1926.

The company manages over 4,500 daily flights to 339 airports on five continents through its subsidiaries United Express and United Airlines.

The extensive route network and hub structure of the Chicago-based airline company are evidence of its strategic stance within the airline industry. Even with a strong loyalty program and strategic partnerships, United still has to contend with fierce competition and volatile fuel prices.

The UAL stock has experienced moderate growth since 2021. The stock has lagged behind the overall market in 2022 and 2023, with falls in both years and a minor gain in 2023.

Nonetheless, strong demand for overseas travel was the primary driver of United Airlines’ impressive second-quarter 2024 profit, which increased by more than 20% YoY.

However, with excessive demand for flights starting to put pressure on pricing, the airline company’s third-quarter outlook fell short of projections. Compared to analysts’ forecasts of $3.44 per share, United now expects to earn between $2.75 and $3.25 per share in the current quarter.

Notwithstanding the difficulties, UAL has profited from its emphasis on foreign markets, where demand is still strong after the pandemic. The company increased the number of premium tickets it offered, and its revenue from these seats increased by more than 8% YoY. Nonetheless, a minor drop in unit revenues has resulted from increasing domestic capacity, which is indicative of the industry’s general battle with surplus capacity.

Scott Kirby, the CEO of United, observed that airlines are starting to reduce their itineraries and that they anticipate a major shift in mid-August. United stuck to its $9 to $11 per share full-year profit target, and it is still confident in its strategic direction.

United Airlines Holdings, Inc. (NASDAQ:UAL) strong market position has led analysts to award the company a “Strong Buy” recommendation. There are 13 analysts who have collectively rated the stock as a “buy.” The average price objective indicates a possible gain of 68.01% from the current stock price of $43.32.