Stock Analysis

United Airlines Holdings (NASDAQ:UAL) is Guiding for an Impressive Recovery in 2022

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Airlines are one of those sectors that are seemingly always struggling. With a bloated cost structure, dependence on the oil prices, high competition, and unimpressive margins – it is not surprising that many investors avoid them altogether. Yet, they are an absolute necessity in the modern economy.

As the broad market seems on shaky legs, carriers like United Airlines Holdings, Inc. (NASDAQ: UAL) are under a spotlight for those who bet on the travel recovery.

View our latest analysis for United Airlines Holdings

First-quarter 2022 results:

  • US$4.24 loss per share.
  • Revenue: US$7.57b (up 135% from 1Q 2021).
  • Net loss: US$1.38b (loss widened 1.5% from 1Q 2021).

Revenue missed analyst estimates by 1.4%, while earnings per share (EPS) exceeded analyst estimates by 1.4%. Over the next year, revenue is forecast to grow 51%, compared to a 41% growth forecast for the industry in the US.

Institutional Optimism vs. Word of Caution

After an earnings announcement, JPMorgan issued a double upgrade, flipping from Underweight to Overweight rating. Their analyst Jamie Baker quoted strong fundamental inputs everywhere except for fuel and geopolitical pressures. JPMorgan has a price target of US$76, which is over 45% above the current levels.

However, CEO Scott Kirby noted that the pilot shortage in the industry is real and that most airlines won’t be able to realize their capacity plans because there aren’t enough pilots for at least the next 5 years. Furthermore, he added that this problem is even riskier with the ongoing pilot-union negotiations that could cause pilot strikes.

Who Currently Owns United Airlines?

With a market capitalization of US$17b, United Airlines Holdings is relatively large. We'd expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. In the chart below, we can see that institutions are noticeable on the share registry. Let's delve deeper into each type of owner to discover more about United Airlines Holdings.

NasdaqGS: UAL Ownership Breakdown April 26th, 2022

What Does The Institutional Ownership Tell Us About United Airlines Holdings?

Institutions typically measure themselves against a benchmark when reporting to their investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

From our data, we can see that institutional investors hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They, too, get it wrong sometimes.

It's, therefore, worth looking at United Airlines Holdings' earnings history below.

NasdaqGS: UAL Earnings and Revenue Growth April 26th, 2022

Institutional investors own over 50% of the company, so together, they can probably strongly influence board decisions. Hedge funds do not hold United Airlines Holdings. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 10%. PRIMECAP Management Company is the second-largest shareholder owning 7.8% of common stock, and BlackRock, Inc. holds about 5.2% of the company stock.

Our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could easily look into forecast growth.

Insider Ownership Of United Airlines Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board, and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Our most recent data indicates that insiders own less than 1% of United Airlines Holdings, Inc. Being so large, we would not expect insiders to hold a large proportion of the stock. Collectively, they own US$60m of stock. Arguably recent buying and selling are just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, usually individual investors, holds a 42% stake in United Airlines Holdings. While this size of ownership may not be enough to sway a policy decision in their favor, they can still collectively impact company policies.

Further Considerations

While pilot shortages are unquestionably real, we should consider that United Airlines, as one of the big airlines, is likely to handle this issue easier than its smaller competitors. Furthermore, the guidance is nothing but impressive, with 10% operating margins forecasted for Q2 2022. With that said, even the modest forecasts now average a price target of US$58.18, based on 20 different analysts.

Finally, the company seems to be able to recapture the costs of surging oil prices with a total revenue per available seat mile (TRASM) set for 17% over 2019 levels.

But to truly gain insight, we need to consider other information, too. Be aware that United Airlines Holdings shows 2 warning signs in our investment analysis, and 1 of those can't be ignored... Do not miss this free report on analyst forecasts if you prefer to discover what analysts predict in terms of future growth.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full-year annual report figures.

What are the risks and opportunities for United Airlines Holdings?

United Airlines Holdings, Inc., through its subsidiaries, provides air transportation services in North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America.

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  • Earnings are forecast to grow 24.38% per year

  • Became profitable this year


  • Interest payments are not well covered by earnings

  • Significant insider selling over the past 3 months

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Simply Wall St analyst Stjepan Kalinic and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Stjepan Kalinic

Stjepan Kalinic

Stjepan is a writer and an analyst covering equity markets. As a former multi-asset analyst, he prefers to look beyond the surface and uncover ideas that might not be on retail investors' radar. You can find his research all over the internet, including Simply Wall St News, Yahoo Finance, Benzinga, Vincent, and Barron's.

About NasdaqGS:UAL

United Airlines Holdings

United Airlines Holdings, Inc., through its subsidiaries, provides air transportation services in North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America.

High growth potential and slightly overvalued.