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Is a New CEO Good News for United's Stock?

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United Continental Holdings (UAL) surprised Wall Street by ousting its long-time CEO and replacing him with a railroad industry veteran. Tracey Ryniec and David Bartosiak, Stock Strategists at Zacks Investment Research, discuss the challenges facing the company going into the second half of the year even as fuel prices remain near multi-year lows.

After being one of the best performing sectors in 2014, the airline industry has hit some turbulence in 2015 . While domestic demand remains strong, international demand has weakened, especially in Brazil and Venezuela. Analysts are worried about too much capacity growth in the sector. There's already been some pricing pressure on certain routes, especially out of Dallas and Chicago.

United is trading with a forward P/E of 5.2. That seems dirt cheap, even with an expected decline in earnings next year.

However, shares pulled back, along with the rest of the stock market, over the summer.

Is United a value trap?

Where are the shares going from here?

See Tracey's and David's insights in the video below.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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