Stocks for United Airlines: What Most People Get Wrong

If you’ve been watching the tickers lately, you know that stocks for United Airlines (UAL) are doing something they haven't done in a long time: they're actually making people look twice. Honestly, for the last few years, airline stocks felt like a "don't touch" zone for anyone who hates volatility. But things have shifted. As of January 13, 2026, United is trading around $114 per share, and the vibe in the market is surprisingly bullish.

Basically, the old story was that airlines just burn cash and buy planes they can't afford. That story is getting old.

Why the Market is Bullish on UAL Right Now

The big news is the earnings report coming up on January 20. Traders are already getting restless. Historically, United has this weird habit of running up right before the numbers drop. We’re talking about an average 3.6% gain in the three days leading up to the announcement, which has happened about 92% of the time over the last few years. It's almost a ritual at this point.

But the "run up" isn't just about gambling on a good quarter. It’s about the "United Next" strategy finally bearing fruit. CEO Scott Kirby has been betting the farm on bigger planes and better seats. And it's working.

The Profitability Shift

In late 2025, United reported a pre-tax margin of 8.2%. That sounds small, but in the airline world, that’s a massive win. They are squeezing more money out of every seat, especially in the premium cabins. Revenue from those fancy Polaris seats rose 6% year-over-year. People are willing to pay for comfort again, and United is leaning into that hard.

Current analyst price targets are all over the place, but they lean toward the high side. We’ve seen some experts, like those at JP Morgan and Wells Fargo, tossing out targets as high as $156. Even the "cautious" ones at BMO Capital are looking at $125. When you compare that to the current $114 price, you can see why the "Moderate Buy" consensus is sticking around.

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The Debt Elephant in the Room

You can't talk about stocks for United Airlines without talking about the debt. It’s the scary part. As of late 2025, the company was sitting on about $25.4 billion in total debt. That is a lot of zeroes.

However, they’ve been aggressive about paying it down. They recently finished paying off those MileagePlus bonds—about $1.5 billion worth. That means the frequent flyer program, which is basically a gold mine, is no longer used as collateral. That's a huge move for their credit rating. Moody's even bumped them up to Ba1, which is just one step away from being considered "investment grade."

Cash Flow Realities

• Free Cash Flow: Expected to hit over $2 billion in 2026.
• Liquidity: They have about $16.3 billion in the bank, which is a decent safety net.
• CapEx: They are still spending billions on new planes (Airbus A321XLRs) to replace the old, thirsty Boeing 757s.

What's Coming in 2026?

Scott Kirby recently sent a memo to staff mentioning "surprises" for 2026. It sounds like typical corporate hype, but there’s substance here. They are finally taking delivery of those long-range Airbus A321XLRs. These planes are game-changers. They allow United to fly "thin" routes—like Newark to smaller European cities—without needing a massive, expensive jumbo jet.

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Better efficiency equals better margins. Better margins usually equal a higher stock price.

The Sustainability Problem

Then there's the fuel. Sustainable Aviation Fuel (SAF) is the industry's big hope, but it's expensive. IATA (the big airline trade group) recently admitted that hitting 2030 green goals is going to be "impossible." United is currently the leader in SAF usage in the U.S., but they’re still only using millions of gallons in an industry that needs billions. If fuel prices spike or green mandates get stricter, that $114 stock price could face some serious gravity.

The Institutional Players

Who is actually holding these shares? It’s not just Robinhood traders.

1. Vanguard Group: Owns over 11% (roughly 37 million shares).
2. Capital International Investors: Holds about 6.8%.
3. BlackRock: Sitting on nearly 5%.

Interestingly, some big-name hedge funds have been piling in. Ken Griffin’s Citadel Advisors boosted their position by over 1,200% recently. When the "smart money" moves that fast, it usually means they see a valuation gap that the rest of the market hasn't closed yet.

Is UAL Undervalued?

Some Discounted Cash Flow (DCF) models are spitting out numbers that look almost fake. One analysis from Simply Wall St suggests a "fair value" of over $300 based on future cash flows. Now, let’s be real—airlines rarely trade at their "fair value" because the risks (oil prices, strikes, global tension) are so high. But even if that $300 is a dream, it suggests that at $114, the stock isn't exactly "expensive."

The P/E ratio is currently sitting around 11x. Compare that to the broader market, which is often 20x or 30x, and United looks like a bargain. But remember, it's a bargain for a reason. One bad geopolitical event and those planes stay on the ground.

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Actionable Insights for Investors

If you're looking at stocks for United Airlines as a potential addition to your portfolio, don't just jump in because the chart looks green. Here is how to actually play this:

• Watch the Jan 20 Earnings: Look specifically at "unit revenue" and "free cash flow." If those beat expectations, the $130 price target becomes very realistic very quickly.
• Monitor Debt-to-Equity: United is at a 1.78:1 ratio right now. If that continues to drop toward 1.0, the stock will likely re-rate higher as it becomes less risky.
• Check the 52-Week High: UAL has been bumping up against its 52-week high of $118. A clean break above that with high volume is a classic technical "buy" signal.
• Hedge for Oil: Since fuel is their biggest variable cost, keep an eye on crude prices. If oil stays under $80, United has a clear runway. If it spikes to $100, those earnings estimates will be slashed.

Your next move should be to pull up the latest Q4 2025 preliminary results once they drop on the 20th and see if the "United Next" CapEx spending is actually being offset by the premium cabin growth they've promised.