CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target of $47, up $6, is 5.1x our 2024 EPS estimate (remains at $9.13; 2023 remains at $9.87), below UAL’s 2018-2019 historical forward average of 8.4x. We believe a discount is merited due to the recent events regarding the Boeing 737 Max-9 aircraft, as the Federal Aviation Administration (FAA) grounded 171 737 Max-9 planes due to increased quality control concerns that arose after a panel blew off an Alaska Air Group (ALK 37 ***) operated flight last Friday. The 737 Max-9 series aircraft currently accounts for roughly, by our estimation, 6% of UAL’s current fleet. In addition, UAL currently has almost 50% of its expected aircraft order book tied to the 737 Max series; however, we believe that the lion’s share of its 737 Max series orders are tied to the 737 Max-8 variety. On Monday, UAL announced that it did have to cancel 200 Max-9 flights. That said, we believe that UAL should be able to switch some flights to other aircraft, which should ease further cancellation pains.