Is United Airlines Holdings Inc (UAL) overvalued?
On Equity Rank's model estimate, UAL trades 46% above its fair value. United Airlines Holdings Inc (UAL) last closed at $112.74; the multi-method model fair value is $77.04.
| Price | Model fair value | Price vs model |
|---|---|---|
| $112.74 | $77.04 | 46% above |
What the answer rests on
- 1 of 12 valuation methods put UAL's value above its price and 11 put it below, so the methods mostly agree.
- To justify today's price, UAL's free cash flow would need to grow about 5.1% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 27.0% a year.
- UAL trades at 10.6 times its last year's earnings, against a median of 9.6 for 7 profitable Airlines companies.
- Over the past year the price sat below the model fair value on 1% of trading days. The gap ranged from 4% below to 56% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind UAL's fair value · What prices assume · Other companies