What’s Next For UAL Stock After An Upbeat Q1?

United Airlines stock (NASDAQ: UAL) has significantly underperformed the broader market this year, experiencing a 30% decline since the beginning of January, while the S&P 500 index is down 8%. This contrasts with the company’s recent Q1 report, which showed revenues and earnings exceeding street estimates. UAL maintained its current outlook and also provided a secondary outlook in the event of a U.S. economic recession. The likely cause of the stock’s decline is increasing concern regarding the potential economic impact of tariffs implemented by the Trump administration. But, if you want upside with a smoother ride than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

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UAL’s Q1 2025 performance exceeded expectations, with adjusted earnings per share of $0.91 on sales of $13.2 billion, compared to the consensus estimate of $0.74 per share. This bottom-line result represents a substantial improvement from the prior-year quarter’s adjusted loss of $0.15 per share. United Airlines’ revenue of $13.2 billion marked a 5.4% year-over-year increase, fueled by a 4.9% rise in capacity (average seat miles), despite a minor one-cent decrease in passenger revenue per seat mile. Furthermore, UAL’s adjusted EBITDA margin expanded by 290 basis points to 9.6% in Q1 2025, benefiting significantly from an 8.6% reduction in fuel expenses. Looking ahead to 2025, the company maintained its adjusted EPS guidance of $11.50 to $13.50 and also provided a lower guidance range of $7.00 to $9.00 in the event of a U.S. economic recession.

Following its positive Q1 results, UAL stock is currently trending upwards. We estimate United Airlines’ Valuation of $96 per share, representing a potential upside of approximately 35% from its current trading price of around $70. This valuation is based on a 9x price-to-earnings (P/E) multiple applied to our projected full-year 2025 adjusted earnings per share of $11.18. While a U.S. economic recession would undoubtedly negatively impact airline stocks, UAL’s strong Q1 performance and attractive valuation at its current level make it a compelling investment opportunity, in our view. But, if you want to explore other investment strategies, consider the Trefis RV strategy that has outperformed its all-cap stocks benchmark (combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), to produce strong returns for investors.

While United Airlines stock looks like it is attractively priced, check out how other United Airlines Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

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