Ahead of the Bell: Goldman cuts UAL to 'Hold'

Christopher Cuomo slashed his price target on UAL--the parent company of United Airlines--to $4.40 from $16, implying he expects shares to decline 4 percent from Monday's close of $4.60. The analyst also removed UAL from the investment bank's "America's Buy List."

A UAL representative could not immediately be reached for comment early Wednesday.

Cuomo said UAL shares have declined 89 percent since he raised the stock to "Buy" in November. In addition, the surge in jet fuel costs--which has gone hand-in-hand with elevated crude prices--has eroded the company's cash flow, he said, while a weaker economy continues to weigh on UAL.

Light, sweet crude for August delivery rose 26 cents to $141.23 a barrel in electronic trading on the New York Mercantile Exchange on Wednesday.

"We remain concerned the airlines, including UAL, will be unable to raise fares enough to offset the spike in jet fuel ... We remain cautious and would avoid long positions in airlines," he said in a note to clients.

Cuomo said shares of Delta Air Lines, which he rates "Buy," are his favored pick in the sector due to the carrier's domestic capacity cuts, its proposed combination with Northwest Airlines Corp. and its international growth strategy.