United Continental Holdings: Turnaround Story With $60 Target Price
Apus Investments • Today, 12:37 PM
- UAL has several cost saving initiatives underway that could result in annual savings of $2 billion by 2017.
- EBITDA margins are poised to expand from 8% currently to 13% (pro forma cost savings).
- The market is currently discounting UAL until results are proven, giving investors an opportunity to enter around $50/share.
- We calculate a target price of $60/share based on a forward EV/EBITDA of 6x and after cost savings of $2 billion.