Sagging first-quarter demand is expected to be overcome by stronger demand over the rest of the year. United’s story for the remainder of 2023 is likely to be more important than its actual first-quarter numbers.
Analysts are moderately bullish on the stock. Of 21 brokerages covering the firm, seven have Hold ratings, while 13 have a Buy or Strong Buy rating. At a share price of around $41.70, the upside potential based on a median price target of $62.00 is 48.7%. At the high price target of $81.00, the upside potential rises to 94.2%.
The consensus first-quarter revenue forecast calls for sales of $11.43 billion, down 7.8% sequentially but 51.0% higher year over year. Analysts anticipate an adjusted loss of $0.73 per share, sharply lower than EPS of $2.46 in the prior quarter and much better than the $4.24 per share loss in the year-ago quarter. For the full fiscal year, analysts expect EPS of $8.68, up from EPS of $2.52 posted a year ago. Revenue is forecast to rise by 17.9% to $53.01 billion.
The stock trades at 4.8 times estimated 2023 earnings, 4.0 times estimated 2024 earnings of $10.36 and 3.4 times estimated 2025 earnings of $12.40 per share. The stock’s 52-week range is $31.58 to $22.04, and United does not pay a dividend. Total shareholder return for the past 12 months was negative 7.67%.
Western Alliance Bancorp
Shares of Western Alliance Bancorp. (NYSE: WAL) have lost about 58% over the past 12 months, including a drop of 47% for the year to date. No secret here: the collapse of Silicon Valley Bank and Signature Bank hit all regional banks hard.
Fitch Ratings on Monday downgraded the stock by two notches from BBB+ to BBB-, the lowest investment-grade rating. The rating agency commented, “Over the near- to medium-term, WAL’s reduced funding flexibility and higher funding costs under tightened liquidity conditions presents execution risks on its asset liability management, which underpins the rating downgrade and Negative Rating Outlook.”
Analysts are solidly bullish on the stock. Of 14 brokerages covering the firm, 12 have a Buy or Strong Buy rating, while two have a Hold rating. At a share price of around $31.70, the upside potential based on a median price target of $57.50 is 81.3%. At the high price target of $77.00, the upside potential rises to almost 143%.
The consensus first-quarter revenue forecast calls for sales of $667.12 million, down 6.1% sequentially but up 18.3% year over year. Analysts are forecasting EPS of $2.03, down 23.9% sequentially and by 9.0% compared to the year-ago quarter. For the full fiscal year, analysts expect EPS of $8.08, down 16.7%, and revenue of $2.72 billion, up 5.5%.
Western Alliance stock trades at 3.9 times estimated 2023 earnings, 3.7 times estimated 2024 earnings of $8.51 and 3.7 times estimated 2025 earnings of $8.56 per share. The stock’s 52-week range is $7.46 to $86.87. The bank pays a dividend of $1.44 (yield of 4.55%). Total shareholder return for the past 12 months was negative 57.36%.
Originally published at 24/7 Wall St.
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