United Airlines Holdings

Methodology

United Airlines' fair value calculation is extremely challenging due to the airline industry's notorious cyclicality, operational leverage, and sensitivity to fuel prices, economic conditions, and external shocks. The method works only when normalized for mid-cycle load factors and margins, as peak earnings precede downturns while trough earnings often signal opportunity. Investors should focus on price-to-book or enterprise value to EBITDAR multiples rather than P/E-based frameworks, as airlines rarely exhibit stable earnings growth suitable for Peter Lynch analysis.

Methodology

PEG ratios are highly misleading for United because airline earnings swing violently with economic cycles, fuel costs, and industry capacity discipline, creating unreliable growth rate inputs. Low PEG ratios during earnings surges typically signal late-cycle peaks rather than value, while high ratios during downturns may represent opportunity if capacity is rational. Enterprise value to EBITDAR or price-to-book relative to through-cycle ROIC provides more reliable valuation frameworks for airlines than PEG analysis.

Methodology

United currently pays no dividend and focuses available cash on debt reduction and fleet modernization rather than shareholder distributions given the industry's capital intensity and volatility. PEGY therefore equals PEG with no yield component, and neither metric is particularly useful for airline valuation. Investors should emphasize balance sheet strength, competitive cost position, and route network quality over EPS-based metrics.