United Cont Holdings: Zacks’ Bull of the Day Play

The drum beats of low oil prices continue, and therefore United Continental Holdings (UALAnalyst Report) is the Zacks Bull of the day!  Estimates for the airline company have been steadily increasing due to the decline in oil prices, improving customer service, and the launch of new routes.

This Zacks Rank #1 (Strong Buy) stock is the holding company for United Airlines, and Continental Airlines.  The company operates in two segments: Mainline and Regional Affiliates.  Further, the company manages its business as an integrated network with assets deployed across its Mainline and regional carrier networks.

United Continental Holdings recently announced that it was extending its in-flight Wi-Fi connectivity service to United Express regional aircraft by the second half of 2015.  The company currently offers their Personal Device Entertainment on almost 200 mainline planes.  Further, the company announced that they started operating six flights a week from Los Angles to Melbourne.

Positive News, Increasing Estimates

The table below shows the historic and future EPS estimates for UAL.

Over the past 30 days, estimates for Q4 14, FY 14, Q1 15, and FY 15 have all substantially increased; Q4 14 increased from $1.13 to $1.19, FY 14 rose from $5.00 to $5.06, Q1 15 jumped from $0.11 to $0.56, and FY 15 shot up to $8.92 from $6.99.  Most if not all of the EPS increase is due to the declining oil prices.

Positive Earnings Surprise

Over the past four consecutive quarters United Continental Holdings has beaten the Zacks Consensus Earnings estimate by an average 6.4%.  Therefore, the company not only has a recent history of beating earnings, they beat it will a little extra each time.

Bottom Line

As oil prices continue to be restrained by increasing US production, United Continental Holdings will reap the benefits.  It is expected that oil prices will be subdued all the way out to the second half of 2015, and therefore the next two quarters should bring in massive profits for the company.

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