UPDATE: Barclays Capital Downgrades United Continental Holdings on Ongoing Competitive Challenges

In a report published Friday, Barclays Capital analyst David E. Fintzen downgraded the rating on United Continental Holdings UAL from Equal-Weight to Underweight, but raised the price target from $30.00 to $38.00. In the report, Barclays Capital noted, “With so much change in the industry over the last 8+ years, separating transitory from structural problems seems to be the major challenge in finding the best relative opportunities. The more we dig, the more inclined we are to think that UAL's revenue woes are not fully merger integration related. Our analysis of DOT data shows the UAL historical revenue premium comes almost entirely from three hubs (Newark, San Francisco and Washington), with the remaining 60% of the network at average industry unit revenue. The declines we've seen in relative revenue (~$700m in lost revenue share) also come nearly exclusively from these same hubs, pointing to very specific and ongoing competitive challenges.” United Continental Holdings closed on Thursday at $33.99.