United Airlines Holdings (NASDAQ:UAL) Sees Increasing Returns on Capital
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 23 2025
0mins
Should l Buy UAL?
Source: Yahoo Finance
Investment Potential in United Airlines: United Airlines Holdings shows promising trends with an increasing return on capital employed (ROCE) of 11%, indicating profitable reinvestment opportunities.
Profitability and Growth: The company has recently turned profitable after years of losses, utilizing 25% more capital than before, which suggests a focus on growth and expansion.
Stock Performance: Over the last five years, United Airlines stock has returned 176% to shareholders, reflecting investor confidence in the company's turnaround and future potential.
Cautionary Notes: Despite its positive trends, there are two warning signs associated with United Airlines Holdings that investors should consider before making decisions.
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Analyst Views on UAL
Wall Street analysts forecast UAL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for UAL is 139.07 USD with a low forecast of 115.00 USD and a high forecast of 156.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
15 Buy
1 Hold
0 Sell
Strong Buy
Current: 106.090
Low
115.00
Averages
139.07
High
156.00
Current: 106.090
Low
115.00
Averages
139.07
High
156.00
About UAL
United Airlines Holdings, Inc. is a holding company. The Company transports people and cargo throughout North America and to destinations in Asia, Europe, Africa, the Pacific, the Middle East and Latin America. The Company, through United Airlines, Inc., and its regional carriers, operates across six continents, with hubs at Chicago O'Hare International Airport (ORD), Denver International Airport (DEN), George Bush Intercontinental Airport (IAH), Los Angeles International Airport (LAX), Newark Liberty International Airport (EWR), San Francisco International Airport (SFO), Washington Dulles International Airport (IAD) and A.B. Won Pat International Airport (GUM). Its hub and spoke system allow it to transport passengers between a large number of destinations with frequent services. The Company has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express. It provides freight and mail transportation services (Air Cargo).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Profitability Decline: American Airlines reported a profit of $111 million in 2025, which pales in comparison to Delta Air Lines' $5 billion and United Airlines' $3.3 billion profits, highlighting a significant gap in market competitiveness.
- Transformation Strategy: Isom has outlined a strategy focused on enhancing customer service and revenue management, expressing optimism for 2026 despite challenges posed by winter storms, and emphasizing the need for accountability from senior leadership and teamwork.
- Intensified Market Competition: American Airlines faces fierce competition at major hubs like Chicago and Charlotte, particularly against United Airlines, with analysts questioning whether the current strategy will effectively close the performance gap with peers, indicating a long road ahead for transformation.
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- Leadership Scrutiny: The airline's poor performance has led pilot and flight attendant unions to question CEO Robert Isom's leadership, arguing that the company has failed to define an effective strategy to correct its course, resulting in employee disappointment about the future.
- Transformation Challenges: American Airlines is attempting to boost revenue through premium product offerings, despite sluggish growth in economy cabin revenue; Isom stated that by 2026, half of the company's revenue is expected to come from
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- Market Context: The actions of the activist investor reflect ongoing changes in the airline's investment landscape.
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See More
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- Profitability Decline: American Airlines reported a profit of $111 million in 2025, which pales in comparison to Delta Air Lines' $5 billion and United Airlines' $3.3 billion profits, highlighting a significant gap in market competitiveness.
- Transformation Strategy: Isom has outlined a strategy focused on enhancing customer service and revenue management, expressing optimism for 2026 despite challenges posed by winter storms, and emphasizing the need for accountability from senior leadership and teamwork.
- Intensified Market Competition: American Airlines faces fierce competition at major hubs like Chicago and Charlotte, particularly against United Airlines, with analysts questioning whether the current strategy will effectively close the performance gap with peers, indicating a long road ahead for transformation.
See More
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- Profit Comparison: American Airlines reported only $111 million in profit last year, significantly trailing Delta Air Lines' $5 billion and United Airlines' over $3.3 billion, indicating a lack of competitiveness that may impact investor confidence.
- Leadership Scrutiny: The airline's poor performance has led pilot and flight attendant unions to question CEO Robert Isom's leadership, arguing that the company has failed to define an effective strategy to correct its course, resulting in employee disappointment about the future.
- Transformation Challenges: American Airlines is attempting to boost revenue through premium product offerings, despite sluggish growth in economy cabin revenue; Isom stated that by 2026, half of the company's revenue is expected to come from
See More
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- Southwest Airlines Performance: Shares of Southwest Airlines have significantly outperformed the broader market in 2026.
- Elliott Investment Management's Involvement: The strong performance follows a year after Elliott Investment Management took an interest in the airline.
- Stake Reduction: Elliott Investment Management is now reducing its stake in Southwest Airlines.
- Market Context: The actions of the activist investor reflect ongoing changes in the airline's investment landscape.
See More
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- Technology Expansion: This partnership positions MasOrange as the first European telco to offer direct-to-device satellite connectivity after Ukraine's Kyivstar, further advancing Starlink's technology deployment in the region.
- Market Potential: Starlink's direct-to-cell technology is expected to enhance internet connectivity for users in remote areas, addressing the growing demand for high-quality internet services and presenting significant market expansion opportunities.
- Future Outlook: As Starlink expands in the EU, it is anticipated to attract more telecom companies, promoting the proliferation of satellite internet services and enhancing overall industry competitiveness.
See More
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- Market Growth Forecast: Willie Walsh, Director General of IATA, indicated that the U.S. aviation market is expected to be 'broadly flat' while global demand is projected to grow by 4.9%, suggesting a potential lag for the U.S. in the global tourism recovery.
- Challenges for Airlines: Walsh highlighted that shortages of aircraft, tariffs, tighter immigration policies, and supply chain issues are impacting major U.S. airlines, leading to stagnation in the American aviation market, which needs to address these structural issues to restore growth.
- Political Interference Concerns: When asked about President Trump's threat to decertify Canadian aircraft, Walsh expressed 'full confidence' in the FAA, believing that politics would not interfere with regulatory matters; however, the FAA Administrator called for equitable resource allocation for certifying U.S. and foreign aircraft.
- Tourism Industry Struggles: According to the WTTC report, the U.S. is expected to see a 6% drop in foreign visitors by 2025, even as global tourism rises, and the ESTA social media disclosure requirement could slash visitor spending by $15.7 billion, impacting 157,000 American jobs.
See More
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- Service Expansion: United Airlines has announced an expansion of its partnership with Elon Musk-backed Starlink satellite internet service, now available on over 300 aircraft, nearly covering its entire regional fleet, with plans to extend to over 800 aircraft by year-end, significantly enhancing passenger internet access.
- User Base: The service is currently utilized by over 7 million passengers, and it is free for MileagePlus members, which not only boosts customer loyalty but also has the potential to attract new users, enhancing the airline's competitive position in the market.
- Industry Dynamics: Despite Ryanair CEO O'Leary's concerns about fuel drag penalties associated with Starlink, he anticipates that all airlines will eventually offer free in-flight Wi-Fi, indicating a gradual acceptance of this technology across the industry and its future ubiquity.
- Stock Performance: United Airlines' stock surged 4.92% at market close on Monday and climbed an additional 0.34% in after-hours trading to $107.72, reflecting positive market sentiment regarding its business expansion and growth potential.
See More
