United Continental (UAL) Hits 52-Week High on Cheaper Crude - Analyst Blog

Shares of United Continental Holdings Inc. ( UAL ) hit a new 52-week high of $49.36 on Aug 20, 2014. However, the company ended yesterday's trading session a little lower at $49.25, reflecting a solid 65% return over the past 12 months.

Since Monday, the company's shares have jumped more than 6% after Brent crude oil hit a new 14-month low on easing supply concerns. Notably, falling crude oil prices indicate lower jet fuel costs, thereby boosting the profitability of airline companies.

Moreover, so far this year the stock has moved up more than 30%, driven by robust financial numbers. United Continental Holdings has delivered positive earnings surprises in three of the last four quarters, with an average earnings beat of 3.95%, including a positive surprise of 5.4% in the second quarter.

Robust Second-Quarter Earnings

On July 24, 2014, United Continental posted its quarterly numbers. The company's second quarter 2014 adjusted earnings $2.34 per share was much ahead of the Zacks Consensus Estimate of $2.22 owing to a strong show within the domestic market. The results improved substantially from earnings of $1.57 per share in the comparable prior-year period.

Estimate Revisions Reflect Strength

Despite the strong price appreciation, the stock has room for plenty of upside, given the positive estimate revisions witnessed over the past 30 days. In the last 30 days, for the current year, the company has witnessed seven upward revisions with the Zacks Consensus Estimate for earnings moving up from $4.11 to $4.46. The Zacks Consensus Estimate for third-quarter 2014 is pegged at $2.29, representing robust year-over-year growth of 51.88%.

Other Stocks to Consider

United Continental Holdings currently holds a Zacks Rank #1 (Strong Buy). Some other airline stocks which warrant a look are Republic Airways Holdings Inc. ( RJET ), Spirit Airlines, Inc. ( SAVE ) and Southwest Airlines Co. ( LUV ). All these stocks sport a similar Zacks Rank #1.

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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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