Citi Remains Buy on United Airlines Stock, Highlights Strong FCF By Investing.com

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On Thursday, Citi reaffirmed a Buy rating on United Continental (NASDAQ:UAL) stock and maintained its $73.00 price target. The company highlighted the airline’s strong potential for free cash flow generation, which is expected to continue throughout the year.

Citi noted that expected earnings per share (EPS) growth and free cash flow (FCF) generation should contribute positively to United Airlines’ stock performance and address what Citi perceives as an oversold condition for the stock.

According to the company, United Airlines’ estimated 2024 price-to-earnings (P/E) ratio is 4.6x, a stark contrast to the airline’s promising free cash flow outlook. The analyst suggested that the company’s pre-2024 capital spending guidance (about $9 billion to $10 billion) may be overstated given current trends.

Citi’s analysis shows that United Airlines plans to strengthen its financial health through continued EPS growth and strong free cash flow generation. These factors are considered key drivers of the stock’s recovery as they could help correct the market’s undervaluation of United stock.

Citi decided to add United Airlines to its focus list, further highlighting the airline’s promising financial outlook. This move underscores the company’s confidence in United’s ability to maintain positive financial performance and deliver value to shareholders.

Investors and market observers alike will be keeping an eye on United Continental’s stock as it navigates the dynamics of the airline industry, fueled by Citi’s bullish outlook and addition to its focus list. The $73.00 price target remains a key figure to watch as the airline works to achieve the financial milestone laid out by analysts.

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