Originally Posted by OTZeagle1

No not kidding.

However, like fellow major airline American Airlines (NASDAQ:AAL), United is spending beyond its means on buybacks. This move could be dangerous for investors in the long run.


This means that United Continental has borrowed every dollar it has returned to shareholders this year. Free cash flow may improve somewhat next year, as capex is set to decline after peaking at $4.6 billion-$4.8 billion in 2017. Still, free cash flow is likely to remain far below the peak levels of 2015 and 2016.

It's also far from clear that the stock is undervalued. While United Continental recently raised its fourth-quarter revenue outlook, it still expects unit revenue to decline 0%-2% year over year. In the long run, it is likely to face higher competition from low-fare carriers in many markets. The company hopes to offset these headwinds through better segmentation and revenue management, but those efforts aren't guaranteed to succeed.

Moreover, jet fuel prices have moved significantly higher in the past few months. As a result, United Continental may need full-year unit revenue growth of 3%-4% in 2018 just to keep its profit margin stable.

If United's profitability will continue to fall in 2018, 10 times earnings might be a very generous valuation. Meanwhile, adding debt to fund share buybacks boosts EPS, but it could also get the company into trouble during the next recession. United Continental shareholders may eventually come to regret management's current love affair with share buybacks.

Originally Posted by OTZeagle1

Medical still garbage, 5hr day Ok, long term med garbage, scope ok but honestly I think scope is a waste of time, my opinion only.