Zacks Investment Research downgraded shares of United Continental Holdings, Inc. (UAL) from OUTPERFORM to NEUTRAL on May 01, 2014, with a target price of $43.00.
We downgrade our recommendation on United Continental from Outperform to Neutral. The company reported weak first quarter 2014 results missing the Zacks Consensus Estimate on both the lines. Further, we expect increased competition in Pacific region, weakness in Japanese currency and slot pair wins by rival carriers to likely affect its performance going forward. However, the company plans to cut costs and enhance productivity by spending less on fuel and optimizing distribution channels. The company is also making solid progress in expanding its on-board products and services in both domestic and international fleet in order to perk up its ancillary revenue contributions. Apart from that, expansion of its global and domestic route network by the introduction of non-stop flights will boost its future performance.
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