4. United Airlines Holdings Inc. (NASDAQ:UAL)
Number of Hedge Fund Investors: 86
United Airlines Holdings, Inc. (NASDAQ:UAL) operates airlines that transport passengers and cargo. Before the pandemic, its strategy centered on cost-cutting while improving margins, which averaged 10.6% between 2015 and 2019. In 2021-22, the company announced a series of aircraft purchases for up to 200 Boeing 787 Dreamliners and 500 narrow-body aircraft, which will join its fleet by 2032. The strategy is to replace less-efficient and smaller jets to substantially boost the average number of seats United can sell on a given flight, with more premium seats and legroom for those willing to pay more. Moreover, it plans to increase plenty of cheap seats that the firm can sell to more leisurely travelers and compete with lower-cost airlines on many of its routes. The stock surged by over 109% in the past 12 months, making it one of the Best Transportation Stocks.
The business posted a record profit in Q4 2024, with pre-tax earnings of $4.2 billion. Furthermore, the company expanded capacity by 6.2% in Q4 2024 compared to Q4 2023, as well as revenue by 7.8%. United Airlines Holdings, Inc. (NASDAQ:UAL) achieved an incredible accomplishment, generating $9.4 billion in operational cash flow and $3.4 billion in free cash flow during the same period.
It reported a $1.5 billion operating profit on $14.7 billion in revenue in the fourth quarter of 2024, exceeding the 10% margin due to high demand during the winter holiday travel season and a 19% drop in quarterly fuel expenses compared to 2023.
TD Cowen analyst Tom Fitzgerald upgraded United Airlines Holdings, Inc. (NASDAQ:UAL) price objective to $165 from $142 and maintained a Buy rating on the stock. The firm was impressed by the company’s earlier results call and felt more confident in their 2025 Best Idea. They believe the business has the potential to capitalize on the present industry dynamic in 2025, with LT investments expected to deliver greater profits in 2026 and beyond.
