United Airlines: Why I Sold My Shares (Rating Downgrade)

Summary:

• I initially rated United Airlines a Hold back in October, but after a 60% price surge and a P/E ratio of 10x, I decided to Sell.
• United’s Q3’24 earnings showed strong profitability driven by lower aircraft fuel costs, but this tailwind is likely to fade in importance during FY’25.
• There is still upside to be captured if investors believe in FY’25 EPS estimate and the continuation of 10x P/E, but I’m cautious about it.
• I sold my United shares to lock in gains, as the airline industry is volatile and future upside is uncertain.

In early October I wrote my first article about United Airlines (NASDAQ:UAL) highlighting why I thought that the recent price appreciation (between August and October) deemed the stock a Hold. Since I was personally invested at the time, I mentioned

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