Imperial Capital Increases United Continental's Price Target By 10%

United Continental Holdings Inc UAL will benefit from lower fuel costs, but lag peers in margins, said a new note from analysts at Imperial Capital. The analysts reiterated an In-Line rating, but increased the price target from $68 to $75, a 10 percent increase. The new target reflects about a 3 percent increase from the stock's current price.

The analysts note that in the Q4 earnings call, the company was confident it would be able to continue to maintain capacity discipline, regardless of where oil trades. However, United's capacity is expected to grow at a rate that is less than GDP.

The new price target reflects updated management guidance – based on 6x 2015 EPS estimate of $13.36. However, Imperial sees better opportunities in the airline sector.

United Continental recently traded at $72.04, down 0.41 percent.