United Airlines stock (UAL) is back above $100 ahead of earnings, up 1.36% on the day, with the company set to release its first-quarter 2026 earnings report after market close.
Analysts expect United to report an EPS of $1.09 for the quarter, a roughly 20% increase from the $0.91 reported in the same period last year. Revenue is projected to reach $14.38 billion, reflecting an 8.8% year-over-year increase. These estimates are being closely watched as they come amid a turbulent period for the airline industry.
One of the most significant developments impacting United Airlines is the reported proposal by CEO Scott Kirby for a merger with American Airlines. Such a merger would create the world’s largest airline, reshaping the competitive landscape. However, the deal would likely face intense scrutiny from regulatory bodies concerned about antitrust implications. The potential merger adds a layer of uncertainty and excitement to the earnings announcement, as investors will be eager to hear management’s perspective on the matter.
Top Australian Brokers
- Pepperstone - Top Australian broker - Read our review
- eToro - Invest in ASX and international shares - Read our review
Adding to the complexity, the airline industry is currently battling soaring jet fuel prices, driven by geopolitical tensions, notably the ongoing Iran war. These elevated fuel costs are putting pressure on profit margins, forcing airlines to increase fares and fees for consumers. United Airlines, like its competitors, is feeling the pinch, and its strategy for mitigating these costs will be a key focus of the earnings call. Some industry observers have suggested that mergers could be a way for airlines to alleviate these financial pressures, further highlighting the significance of the proposed American Airlines deal.
United Airlines’ recent performance provides some context for the upcoming earnings release. In the fourth quarter of 2025, the airline reported adjusted EPS of $3.10, exceeding analyst estimates of $2.94. The company also achieved record revenue of $15.4 billion, fuelled by strong demand for premium travel. Premium cabin revenue saw a 12% year-over-year increase, while loyalty revenue grew by 9%. These strong results demonstrate United’s ability to capitalize on favourable market conditions, but the current environment presents new challenges.
The options market is currently pricing in an implied move of approximately ±7.08% for UAL’s stock price following the earnings announcement. This indicates a high degree of uncertainty among investors regarding the company’s financial performance and future outlook. The wide implied move suggests that the market is bracing for a potentially volatile reaction to the earnings news.
From a technical perspective, United Airlines’ stock is currently trading above both its 50-day and 200-day simple moving averages, which stand at $95.21 and $92.28, respectively, suggesting an upward trend in the stock price.
Investors will be scrutinizing United Airlines’ earnings report for insights into several key areas: the company’s strategies for managing rising fuel costs, updates on the potential merger with American Airlines, the ongoing demand for premium travel services, and overall financial guidance for the remainder of 2026. The company’s ability to navigate these challenges and capitalize on opportunities will ultimately determine its stock performance in the coming months.
Price Targets
Bull Case:
- Analysts have a “Strong Buy” consensus rating with an average price target implying significant upside.
- The stock is trading above its 50-day and 200-day simple moving averages, a positive technical indicator.
- Strong recent performance, including record revenue and robust demand for high-margin premium travel in Q4 2025.
- A potential merger with American Airlines could create a dominant market leader and unlock significant synergies.
- Projected year-over-year growth in both EPS (20%) and revenue (8.8%) for the current quarter.
Bear Case:
- Soaring jet fuel prices are putting significant pressure on profit margins across the industry.
- The proposed merger with American Airlines faces major regulatory hurdles and uncertainty.
- High implied volatility in the options market (±7.08%) signals investor nervousness and potential for a sharp price decline.
- Recent stock volatility, with the price well below its all-time high, indicates market skittishness.
- Analyst estimates have been revised downwards, suggesting that initial optimism may have been tempered by recent challenges.
