United Airlines Stock Plunges 10% After Earnings: Time to Buy?

On Wednesday afternoon, United Airlines (NASDAQ: UAL) posted second-quarter earnings results that fell short of analysts' expectations. CEO Scott Kirby also warned that the airline industry faces three big challenges: operational constraints (mainly related to staffing) that are limiting capacity, record fuel prices, and the threat of a recession in the near term.

Despite these headwinds, United provided strong guidance for the third quarter. Furthermore, the airline said it is on track to expand its adjusted pre-tax margin to around 9% next year and roughly 14% by 2026. Nevertheless, United Airlines stock plummeted 10% on Thursday, falling toward the low end of its recent trading range.

If the company meets its financial targets, United Airlines shares will probably skyrocket over the next few years. However, United's targets look awfully aggressive, making the stock appropriate only for the most risk-tolerant investors.

Source Fool.com