U.S. markets closed
  • S&P 500

    4,471.37
    +33.11 (+0.75%)
     
  • Dow 30

    35,294.76
    +382.20 (+1.09%)
     
  • Nasdaq

    14,897.34
    +73.91 (+0.50%)
     
  • Russell 2000

    2,265.65
    -8.52 (-0.37%)
     
  • Crude Oil

    82.66
    +1.35 (+1.66%)
     
  • Gold

    1,768.10
    -29.80 (-1.66%)
     
  • Silver

    23.35
    -0.13 (-0.54%)
     
  • EUR/USD

    1.1606
    +0.0005 (+0.05%)
     
  • 10-Yr Bond

    1.5760
    +0.0570 (+3.75%)
     
  • GBP/USD

    1.3751
    +0.0074 (+0.54%)
     
  • USD/JPY

    114.2000
    +0.5230 (+0.46%)
     
  • BTC-USD

    61,040.28
    -368.12 (-0.60%)
     
  • CMC Crypto 200

    1,464.06
    +57.32 (+4.07%)
     
  • FTSE 100

    7,234.03
    +26.32 (+0.37%)
     
  • Nikkei 225

    29,068.63
    +517.70 (+1.81%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

United Airlines shares fall 54% in the two months since analyst downgrade

·Markets Reporter
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

[CORRECTION: An earlier version of this story noted that Argus Research’s downgrade note was published on May 11. It was actually published on March 10. This article has been edited.]

United Airlines Holdings (UAL) was downgraded on March 10 to a Hold rating from Buy by Argus Research based on a “deteriorating outlook” for the airline amid the COVID-19 pandemic and other challenges.

“United Airlines faces multiple headwinds in 2020,” Argus analyst John Staszak wrote. “Even prior to the coronavirus outbreak, flight demand had weakened due to the U.S.-China trade war and slower economic growth in China.”

Air travel volume collapsed amid social distancing practices aimed at containing the spread of the coronavirus. But even as the economy slowly reopens, Staszak believes the industry is “unlikely to recover while the virus remains a threat.”

Staszak noted that the airline also continues to face pressure from the grounding of Boeing’s (BA) 737 MAX jets along. Furthermore, pilot compensation costs continues to rise.

Argus lowered its United Airlines 2020 earnings per share estimate to $11.10 from $13.25.

Shares closed at $52.56 when Argus initially downgraded the stock. Today, it closed at $23.97.

[To read the full report from Argus Research, sign up for Yahoo Finance Premium. Click here to start your free trial and step up your investing.]

Empty United Airlines ticket machines are shown at the Tampa International Airport Friday, April 24, 2020, in Tampa, Fla. Business at the airport has been at a near standstill due to the coronavirus outbreak. (AP Photo/Chris O'Meara)
Empty United Airlines ticket machines are shown at the Tampa International Airport Friday, April 24, 2020, in Tampa, Fla. Business at the airport has been at a near standstill due to the coronavirus outbreak. (AP Photo/Chris O'Meara)

Earlier this month billionaire investor Warren Buffett revealed during Berkshire Hathaway’s annual shareholder meeting that the company sold its entire stake in the four major airlines, which included United, American (AAL), Delta (DAL) and Southwest (LUV).

Buffett called the investment an “understandable mistake,” and said “the world changed for airlines.”

“The airline business has the problem that if the business comes back 70% or 80%, the aircraft don't disappear. So you've got - you've got too many planes,” said Buffett.

Last month United reported a net loss of $1.7 billion for the first quarter of 2020, as the airline industry slashed capacity and air travel demand plummeted amid shelter in place measures world-wide.

-

Ines covers the U.S. stock market from the floor of the New York Exchange. Follow her on Twitter at @ines_ferre

Read more:

Find live stock market quotes and the latest business and finance news

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.

Yahoo Finance Premium
Yahoo Finance Premium