United Airlines (UAL): Exploring Valuation After Recent 5% Share Price Move

United Airlines Holdings (UAL) has recently seen its stock swing down about 5% this week, drawing fresh attention from investors. Given its solid revenue and recent year-over-year profit growth, many are weighing what is next for the airline.

See our latest analysis for United Airlines Holdings.

Despite a rocky week, United Airlines Holdings has been in the spotlight for much more than its latest share price dip. Over the past year, the airline’s total shareholder return has soared 56.42%. There has been even stronger momentum when looking at its 3- and 5-year results, which suggests investors remain optimistic about United’s ability to navigate industry challenges and capitalize on travel demand.

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But after such strong returns, is United Airlines Holdings still trading at a discount, or have future gains already been factored into the current price? Could this be the buying opportunity attentive investors are seeking, or is the market already ahead of the story?

Most Popular Narrative: 15.9% Undervalued

United Airlines Holdings last closed at $96.67, yet the most widely followed narrative suggests a fair value of $115. This places the share price well below the level many analysts believe is justified by the company's fundamentals and outlook.

United's continued focus on premium product expansion, including larger premium cabins and new offerings like the Polaris Studio Suite, aligns with growing consumer preference for experiential and higher-yield travel. This strategy drives higher yields per passenger and supports margin expansion.

Read the complete narrative.

Want the full story behind this bullish valuation? The narrative’s price target is built on a bold mix of top-line growth, improving operating margins, and future earnings targets that rival some of the market’s most ambitious companies. Craving specifics? Uncover which levers could send United Airlines soaring and what revenue, profit, and market assumptions are driving that fair value.

Result: Fair Value of $115 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent expense pressures and shifting business travel patterns could challenge United Airlines Holdings’ premium strategy and put pressure on future profit growth.

Find out about the key risks to this United Airlines Holdings narrative.

Another View: SWS DCF Model Points to Overvaluation

While analyst consensus suggests United Airlines Holdings is undervalued, our SWS DCF model paints a different picture. According to this method, United’s current share price of $96.67 sits well above our fair value estimate of $37.39. That is a significant discrepancy, raising the question: are the market’s growth expectations too generous, or is the DCF method underestimating United’s future?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out United Airlines Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own United Airlines Holdings Narrative

Prefer your own analysis or think the story goes deeper? You can easily build a custom narrative using our data in just a few minutes: Do it your way

A great starting point for your United Airlines Holdings research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.

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