United Airlines: Company Profile, Financial Analysis, and Projections and Valuations

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United Airlines
1. Company Profile
United Airlines Holdings, Inc (UAL) is a company that provides air transportation services in the US and worldwide. Through the company's mainline operation, UAL provides quality air passenger and cargo transportation services. There are full-sized jet aircraft and smaller aircraft under the carrier. Besides passengers and cargo, ULA offers shipping services of trim packages and freight across the globe. However, United Airlines is mainly a domestic carrier operating across the various US and North American cities. The other markets are Latin America & Caribbean, Europe & Middle East, Africa, Asia & Pacific, and in Africa, the company only flies to South Africa. The company also offers ancillary services in the US and is headquartered in Chicago.
The company's stock has been was a downward trend from January 2020 to May 2020 but has risen slightly since then. In January 2020, the stock price ranged from $ 74.8 to $ 89.74, but in January 2021, the stock went from $40.74 to $45.85 (Yahoo Finance). Other companies also experienced losses and a fall in the stock value when the pandemic hit the US. When compared to the company's competitors, UAL had a smaller percentage increase in the stock value.
Among the company's closest competitors are American Airlines, JetBlue Airways, Southwest Airlines, and Delta Air Lines. American Airlines' stock had increased gradually in the last quarter of 2020, and the company's stock was $12.56 on 1st October and increased to 15.77 by December 2020 and $ 23.90 by 31st March 2021, which was almost double the value six months prior (Yahoo Finance, 2021). JetBlue Airways stock was $ 11.46 and $ 14.54 on 1st October 2020 and 31st December 2020 and had increased to $ 20.34 on 31st March 2021, respectively. Southwest Airlines stock increased from 46.61 on 31st December 2020 to 61.06 on 31st March 2021, while in the same period, the stock for Delta Air Lines increased from $ 40.21 to $ 48. 83 (Yahoo Finance, 2021). The Delta Air Lines stock was the second worst-performing stock after United Airlines when considering the percentage change in value.
2. Financial Analysis
After identifyingthe most crucial financial information presented by the United Airlines Company in the 2020 financial year, ratio analysis is provided based on data from the income statement and balance sheet. Owens reports that in the first three months of 2021, United Airlines Holding has already lost more than $ 1.3 billion. Still, the management argues that there are now more open international routes for vaccinated passengers. The company’s revenue was USD 3.22 billion for the three months compared to USD 7.98 billion in 2020, indicating that thecompany suffers record losses by the end of the year (Owens). As United Airlines missed expectations, the stock’s value is likely to decline in the coming months.
Income Statement (appendix)
Sales growth was 9.31% in 2018 but increased to 4.74% the following year-end decreased by -64.50% in 2020. The total operating income decreased from USD 43 259M in 2019 to USD 15,355 M in 2020. Whilethe total operating expenses also reduced, the revenue declined at a higher rate, so the company rep...