2023-07-17 08:51:05 ET
Citi called United Airlines Holdings ( NASDAQ: UAL ) agreement in principle with the pilots union a step in the right direction. The Air Line Pilots Association still needs to ratify the deal , but the union valued it at around $10B, and it includes raises for pilots by up to 40% over the four-year span, as well as job security assurances and retirement benefits.
While details of the agreement that are still unclear include the pay increases by aircraft type and adjustments to lifestyle benefits agreement, Citi analyst Stephen Trent said the development would seem to at least lower the temperature around the carrier’s labor negotiations, despite the uncertainties about costs.
Separately, American Airlines Group ( AAL ) has stated that it would match the pilot agreements of rivals, but it is unclear whether any aspects of the UAL agreement in principle could lead American Airlines to sweeten its offer.
Following the labor development, United Airlines ( UAL ) still screens at Citi as one of the best-positioned U.S. carriers and is expected to see international ticket revenue momentum over the next year. United Airlines ( UAL ) has 13 Buy-equivalent ratings from Wall Street analysts vs. 6 Hold-equivalent ratings and 2 Sell-equivalent ratings. The Seeking Alpha Quant Rating on UAL is flashing Strong Buy due to high marks for valuation, growth, and profitability. Seeking Alpha analysts have a consensus Buy rating on UAL.
Shares of United Airlines ( UAL ) inched up 0.07% premarket on Monday to $53.38 vs. the 52-week trading range of $31.58 to $57.45. The airline stock trades back above its 50-day, 100-day, and 200-day moving averages. The relative strength index on UAL is still over 50 to indicate directional strength. Shares of American Airlines Group ( AAL ) dipped 0.25% in premarket action.
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United's labor deal with pilots is called a step in the right direction