United eyes record year as traders pile back into airline stocks

Shares of United Airlines Holdings Inc. have been on a tear lately, outpacing rivals as investors pile back into the once-unloved airline sector. However, despite the huge run-up in the stock, analysts are confident the rally has more room to run. United’s shares jumped more than 37% in October, their best monthly return since surging 40% in February 2010. The recent gains have propelled United’s 93% year-to-date rise, trouncing peers Delta Air Lines Inc. and Alaska Air Group Inc. which have risen 44% and 24% respectively. If the gains hold through the end of the year, it’ll be the stock’s best annual performance on record. “United is representative of a broadening of the market,” said Jane Edmondson, head of thematic strategy at TMX VettaFi. “If we continue to see this growth trend over the next few quarters, it’s definitely going to be on people’s radars,” she added. So what’s behind investors’ heightened appetite for the stock? Industry-wide plans to cut back on unprofitable routes over the summer have contributed to strength within the sector more broadly, with the S&P Supercomposite Airlines Sub Industry Index trading around levels unseen in nearly three years. Earnings from United pushed gains further after the Chicago-based carrier reported Q3 profit in mid-October that beat Wall Street’s projections. Subdued oil prices are also a big help as aviation fuel is one of the industry’s biggest expenses. United’s stock closed Friday at its highest level since February 2020, climbing for a record-extending 13 straight weeks.<br/>