United Airlines Earnings
United stock is trending bearish
United Airlines UAL releases quarterly earnings at market close today. The Options AI website is projecting a move of ~4.2% from yesterday’s close in either direction. That gives us a range of around $45 to $50 as target price for UAL post earnings.
UAL, as we know, was severely impacted due to COVID last year. It’s stock price had fallen from around $80 down to $20 between February and May 2020. It has since recovered somewhat but still languishing at around $47.
Zacks as printed in Yahoo “expects United Airlines (UAL) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2021.”
“This airline is expected to post quarterly loss of $1.49 per share in its upcoming report, which represents a year-over-year change of +81.7%. Revenues are expected to be $7.81 billion, up 213.7% from the year-ago quarter.”
At the last 3 earnings release the follow-up stock price move has been:
Jan 20 - 21, 2021: -5.73%
Apr 19 - 20, 2021: -8.53%
Jul 20 - 21, 2021: +3.84%
My assessments are:
The UAL stock price is currently trending bearish with recent high of $51
Earnings growth could be related to coming off COVID affected market bear market where the company was severely impacted
The stock price has doubled from it’s last year lows and could be priced to perfection meaning any miss may make the stock price nosedive
My decisions are:
Play for downside move so sell upside calls
Keep a range of ~10% out of the money to be safe
Trade the weekly expiration options so just playing the earnings event
Create iron condor with minimum risk, if premium makes sense
OK, I am ready to make a trade.