United Airlines stock rose more than 6% to $93.72 in early Thursday trading, building on a 2.4% gain from the previous session.
The move came after the airline delivered second-quarter earnings that beat analyst forecasts and reported a notable acceleration in demand so far in July.
By 10:24 am, the stock had given up some of the gains and was up by 2.76%.
The airline said it has seen a six-percentage-point increase in overall demand since the start of the month, with a double-digit uptick in business travel demand compared with the second quarter.
This suggests improving sentiment around travel as geopolitical and economic uncertainties that weighed on the industry earlier this year begin to lift.
United reported adjusted earnings of $3.87 a share for the quarter, exceeding the $3.81 per share analysts had expected.
Total operating revenue rose 1.7% year over year to $15.2 billion, while net income came in at $973 million, down 26% from a year ago.
United lowers guidance; analysts call update ‘pragmatic’
Despite the upbeat earnings and demand trends, United lowered its full-year profit guidance to a range of $9 to $11 a share.
That compares with two guidance scenarios the airline issued in April — $11.50 to $13.50 in a stable environment, and $7 to $9 in a recession.
The current Wall Street consensus forecast is $10.11 per share.
While some investors were initially spooked by the lowered outlook, analysts view the update as pragmatic.
“We view United’s results and commentary positively and as further evidence of the ongoing divergence between full-service carriers and low-cost carriers,” TD Cowen analyst Tom Fitzgerald said, reiterating a Buy rating and a $101 price target on the stock.
Currently, the stock is trading at $90.24.
Notably, United’s capacity increased by 5.9% year over year, though total revenue per seat-mile fell 4%, and cost per seat-mile edged up 0.6%.
Momentum building for legacy carriers
United’s results follow Delta Air Lines’ strong earnings last week, which helped lift sentiment across the airline sector.
Delta restored its full-year forecast after withdrawing it in April, when sweeping tariffs were announced by the Trump administration.
Analysts believe United’s ability to maintain robust demand and adjust its outlook proactively has helped it outperform peers in a volatile year.
The airline’s premium cabin revenue rose 5.6% from a year ago, basic economy revenue grew 1.7%, cargo rose 3.8%, and loyalty-related revenue jumped 8.7%.
CEO Scott Kirby said the latest performance is “more proof that the United Next strategy is working,” and pointed to expectations of another supply shift in mid-August that could benefit the carrier further.
Operational performance also improved, with United posting its best second-quarter post-pandemic on-time departure and seat cancellation scores.
At Newark Liberty International Airport, it recorded better on-time arrivals than major competitors at JFK and LaGuardia.
Though United shares are down 8.9% year-to-date, the stock has rebounded sharply — up over 130% from its April lows.
Analysts remain overwhelmingly positive, with 88% of those covering the stock assigning it a Buy rating and an average price target of $101.75.
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