United Airlines shares rises after UBS upgrade
Shares of United Airlines soar as UBS upgrades to 'buy' on forecast of faster revenue growth
NEW YORK (AP) -- Shares of United Airlines' parent rose Tuesday after UBS upgraded the stock on expectations of faster revenue growth.
UBS lifted United Continental Holdings Inc. to "Buy" from "Neutral" while keeping a target of $50 for the shares.
An analyst for UBS, Darryl Genovesi, wrote in a note to clients that so-called unit revenue is poised to grow faster starting in the April-through-June quarter. Unit revenue is the amount that an airline takes in for every seat flown one mile, and it's a closely watched figure in the industry. It can rise when average fares climb or more seats are filled.
United's revenue has been hurt by increased competition in its markets, but that trend appears to be slowing, Genovesi said.
The airline could also top "depressed" expectations for the first quarter, mainly on lower costs per seat, the analyst added. United recently cut its first-quarter outlook for unit revenue after a high number of weather-related cancellations this winter.
In afternoon trading, shares in the Chicago-based airline rose $2.02, or 4.5 percent, to $46.65. They began the day up 18 percent in 2014.
Other big airlines also gained. American Airlines Group Inc. rose $1.42, or 3.9 percent, to $38.02; Delta Air Lines Inc. added 81 cents, or 2.3 percent, to $35.46; and Southwest Airlines Co. picked up 18 cents to $23.79.
