United Airlines: Nothing Impressive Other Than Its Valuation

Summary:

• I give United Airlines Holdings, Inc. a hold rating.
• The company suffers from poor annual free cash flow due to large capital expenditures and is excessively leveraged, even for the passenger airline industry.
• United borrows approximately $370 for every $100 raised from investors, with a less than stellar 6.85% ROIC to show for it.
• However, the company is one of the most undervalued among airline stocks, boasting among the highest earnings yield based on forward-looking metrics, and has high-quality earnings.

Investment Thesis

I give United Airlines Holdings (NASDAQ:UAL) a hold rating because, though the company is one of the most undervalued among airline stocks, boasting among the highest earnings yield based on forward-looking metrics, and has high-quality earnings, United suffers from poor

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