Shares of United Airlines sank 6.7% to $90.64 as investors digested a jarring contradiction: a strong quarter followed by a warning that the rest of the year could look drastically worse. The carrier slashed its 2026 earnings outlook to $7–$11 per share, down from $12–$14, as it grapples with surging jet fuel prices tied to the Iran war. For shareholders, the message is clear — geopolitics now controls United's bottom line more than operational performance does.
A Blowout Quarter That Nobody Cared About
Q1 adjusted EPS of $1.19 and revenue of $14.61 billion cleared analyst forecasts of $1.07 and $14.37 billion, respectively.
Net income jumped 80% year-over-year to $699 million. Yet the stock still fell, because Wall Street prices the future, not the past — and the future just got $340 million more expensive per quarter in fuel alone.
Jet Fuel Has Nearly Doubled, and United Can't Control It
U.S. jet fuel stood at $3.51/gallon on Monday, down from a peak of $4.78 on April 2, but far above the $2.39 recorded on Feb. 27, the day before strikes on Iran began.
United projects Q2 fuel averaging $4.30/gallon — meaning it's budgeting for prices to rise again. At today's midpoint guidance of $9 EPS, the stock trades at roughly 10× earnings, cheap on paper but only if fuel cooperates.
Cutting Flights to Cut Costs — a Double-Edged Sword
United plans to trim about 5 percentage points of previously planned capacity, with Q3 and Q4 growth now expected at flat to up just 2%. Fewer flights mean lower fuel bills, but also fewer seats to sell. Management's own guidance assumes it can pass along only 40–50% of fuel cost increases to passengers in Q2, rising to 85–100% by Q4 — a bet that demand stays strong enough to absorb repeated fare hikes.
Analysts Still Say Buy, but the Targets Keep Dropping
Jefferies cut its price target from $148 to $125.
Citi trimmed to $132 from $155.
Morgan Stanley maintained an Overweight rating, arguing United's transparency — issuing revised guidance instead of withdrawing it like Alaska Airlines did — should earn investor trust. The bulls see a compressed valuation poised to snap back if ceasefire talks bring oil down; the bears see an airline spending billions on fuel it can't hedge, in a war it can't predict.