The shares of United Airlines parent UAL Corp. are down 1% after Credit Suisse analyst Daniel McKenzie slashed his fourth-quarter profit estimate for the company and lowered his target price for the stock. McKenzie noted that UAL's third-quarter results beat his expectations, but he expects rising fuel prices to pressure the company's fourth-quarter report. He cut his fourth-quarter forecast for the airline from a 15 cent per-share profit to a loss of 90 cents per share, and reduced his price target for the equity from $58 to $55.
As a result of this negative analyst attention, the shares have now given back a portion of the 3.8% they tacked on yesterday. UAL is currently trading above its 10-day and 20-day moving averages, but its relationship with these short-term trendlines has been a tumultuous one throughout 2007.
Unfortunately, the stock is vulnerable to more pessimistic attention from the brokerage-firm contingent. Zacks reports that the company has 5 strong buy and 1 buy ratings, compared to just 3 holds and 1 strong sell. Further downgrades could apply more selling pressure to the stock. Meanwhile, the accumulation of 14.8 million shorted shares has left UAL with a respectable short-interest ratio of 3.5 days to cover though the airline may find it lacks the kind of good news that can spark a short-covering rally as crude continues to race to record-high prices.