Is United Airlines Stock Poised For Sizable Gains?

United Airlines’ Boeing 767-400 ER Extended Range aircraft, powered by two CF6-80 engines, landed at… [+] The Netherlands’ Amsterdam Schiphol International Airport (AMS EHAM) is located in Amsterdam, the Dutch capital. The plane’s registration number is N66057, and it’s a Boeing 767-424(ER). UAL / UA is an American airline based in Chicago, Illinois that connects Amsterdam to Chicago O’Hare, Houston Intercontinental, Newark, Washington Dulles, and San Francisco on a seasonal basis. (Photo courtesy of NurPhoto/Nicholas Economou via Getty Images)
NurPhoto courtesy of Getty Images
Despite a significant increase in air travel demand, United Airlines (NASDAQ: UAL) shares are still trading 30% below pre-Covid levels. Passenger numbers at TSA checkpoints are nearly 20% lower than in 2019, indicating that the travel and tourism industry is still recovering. The company has been awarded a third round of payroll assistance from the US government, which will last through September 30, 2021. The corporation recorded $4 billion in operating cash outflow during the pandemic, and Trefis believes the stock can see substantial profits if investors overlook pandemic losses. Should You Consider United Airlines Stock For A Bull Rally?, a previous analysis, analyzes the important elements in favor of a rally in United Airlines stock. But how do these figures vary if you choose to hold United Airlines stock for a shorter or longer period of time? On the Trefis Machine Learning Engine, you may test the response and many other combinations to see if United Airlines stock would rise following a decline. You can evaluate the likelihood of recovery across time intervals of a quarter, month, or even a single day!
TRY THE MACHINE LEARNING ENGINE FOR YOURSELF:
IF UAL stock moves -5 percent in 5 trading days, THEN UAL stock moves an average of 4.2 in the next 21 trading days, with a 62 percent chance of a positive return.

Trefis Average Return
Making Sense of United Airlines Stock Movements: Some Fun Scenarios, FAQs, and Making Sense of United Airlines Stock Movements:
Question 1: Is United Airlines stock’s average return higher following a drop?
ADDITIONAL INFORMATION FOR YOU
Answer:
Consider the following two scenarios: Case 1: United Airlines Holdings’ stock falls by 5% or more in a week.
Case 2: The stock of United Airlines Holdings rises by 5% or more in a week.
Is the average return on United Airlines Holdings stock higher after Case 1 or Case 2 in the following month?
After Case 1 (where the stock has just suffered a 5% loss over the previous week), UAL stock performs better, with an average return of 4.2 percent over the next month (21 trading days) vs a return of 0 percent for Case 2 (where the stock has just suffered a 5% loss over the previous week).
In example, the S&P 500 has an average return of 3.1 percent in Case 1 and barely 0.5 percent in Case 2 over the next 21 trading days, according to our dashboard, which shows the average return for the S&P 500 after a decline or rise.
Try out the Trefis machine learning engine above to see how United Airlines Holdings stock will react following a given gain or loss over time.
Question 2: Does it pay to be patient?
Answer: If you buy and hold United Airlines Holdings shares, you may anticipate near-term swings to fade away with time, and a long-term favorable trend to favor you – at least if the company is otherwise healthy.
Overall, facts and Trefis’ machine learning engine estimates show that patience pays off in most stocks!
The following table shows the returns for UAL stock over the next N days after a -5 percent shift over the previous 5 trading days, as well as the returns for the S&P500:

Trefis Average Return
Question 3: If you wait a bit following a climb, what is the average return?
Answer: As mentioned in the preceding question, the average return after a rise is lower than after a decrease. However, most companies should be avoided short-term bets if they have gained in the recent few days, with the exception of UAL stock, which looks to be an exception to this general rule.
The table below shows UAL’s returns over the next N days after a 5% shift over the previous 5 trading days, as well as the S&P500’s returns:

Trefis Average Return
By adjusting the variables in the charts above, you can test the trend for United Airlines Holdings stock for yourself.
Do United Airlines’ competitors provide higher returns? The United Airlines Stock Comparison With Peers chart shows how UAL stacks up against its competitors on key parameters. Peer Comparisons has a lot more of these kinds of valuable comparisons.
Here you may find all of Trefis’ Featured Analyses and Trefis Data.
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