TD Cowen has named United Airlines its top U.S. airline pick, citing the carrier’s diversified revenue streams and strong balance sheet as key advantages amid rising jet fuel prices. The firm reduced its price target for United to $192 per share, representing roughly 13.0 times its projected 2027 earnings per share, while also raising the lower end of its full-year 2026 guidance after the airline reported adjusted second-quarter earnings of $1.99 per share.
The upgrade contrasts with a broader downward adjustment in earnings estimates for the six largest U.S. airlines and SkyWest, as TD Cowen anticipates continued pressure on profitability from elevated fuel costs. Bernstein separately raised its price target for United to $162, reflecting a more optimistic outlook on the carrier’s ability to navigate industry challenges.
Delta Air Lines, another major carrier, saw its price target cut by TD Cowen to $105 per share, or about 14.0 times its 2027 earnings per share. The firm’s sector update, released ahead of the September conference season, underscores the dual forces of resilient travel demand and rising operational costs. While corporate travel remains robust, price-sensitive leisure travelers are showing more cautious spending in response to higher fuel prices.
TD Cowen expects strong third-quarter demand, particularly in the autumn, though it anticipates continued pressure on yields as airlines grapple with fuel expenses. The firm also highlighted favorable year-over-year comparisons in the fourth quarter, aided by last year’s government shutdown and the exit of Spirit Airlines, which should support revenue per available seat-mile (RASM) outlooks through April 2027. Upcoming industry conferences are expected to focus on capacity growth projections, revenue trends, and the ability of airlines to pass on higher costs to passengers.
