United airlines (NASDAQ:UAL) has had a difficult year so far. UAL stock was at $ 40.62 at midday on December 15, down slightly from its level of $ 43.25 last year. That brings it down 6.1% so far year-to-date (YTD).

The stock is also down 14.4% year-over-year (YOY) from $ 47.46. Investors have shed the stock lately as it had already hit a closing peak of $ 62.45 in the spring on March 17.

Additionally, UAL stock even experienced a recent mini-spike on November 8 when it hit $ 53.11. But since then it has fallen 23.5%, or $ 12.49 per share.

How much are United Airlines shares worth now

However, this now makes UAL stock very attractive as a potential value investment. For one thing, its outlook isn’t really that bad. As of December 15, 22 analysts surveyed through In search of the alpha now estimate that the company will achieve earnings per share (EPS) of $ 2.22 next year. This places the UAL stock in a cheap futures price / earnings (P / E) multiple of just 18.3x.

Additionally, by December 2023, analysts still see the company making a significant rebound in EPS. This is because their forecast of average earnings is $ 7.62 per share. This puts the UAL action on a forward multiple of only 5.33 times.

Historically, this is very cheap for UAL stock. For example, The morning star indicates that the forward P / E multiple for UAL on average has been 8.7 times in the last 5 years. Compared to its multiple of 5.33 in 2023, this implies that UAL is too cheap. To be equivalent to the multiple of 8.7 times, the stock would have to be 63% higher.

However, we need to adjust the multiple of 2023 first. That’s because it’s two years away. Assuming a 10% discount rate to bring this back to the present, the ratio would be 82.64% of that multiple, or 7.19 times.

Therefore, this implies that the ALU stock should be 34.9% higher. In other words, it’s worth $ 54.75 per share. That’s 34.9% from its Dec. 15 price of $ 40.62.

This means that UAL stock is very cheap on a historical basis. Our price target is based solely on the assumption that the stock will rise to its mid-term P / E multiple. But it could also go higher than that. Over time, this tends to happen, especially when there is good news.

What to do with UAL Stock now

Analysts are now fairly positive on UAL stock, assuming earnings continue to rebound. For example, there are now seven analysts who have written about the company in the past three months, according to TipRanks. Their average price target over the next 12 months is $ 59.43 per share, or 43.8% from yesterday’s price. That’s even higher than my target price of $ 54.75.

In addition, In search of the alpha reports that 22 analysts have made recommendations in the past 90 days. Their average price target is $ 58.40, which is even higher than the TipRanks medium.

Knowing that the market believes the company’s earnings are on the mend should reassure investors. Granted, some analysts are concerned that the omicron variant could cause short-term headwinds for the airline as travelers stay away.

But it doesn’t appear to be a full-blown travel panic just yet, as it did in early 2021. This period was one of the worst incidents to ever hit the airline industry, but it did. should not repeat itself any time soon.

As a result, now is a good time for value investors and those who are patient with their investment capital to start buying UAL stocks. True, you may need to hold them for at least a year before the market turns more positive on the stock. But the prospect of a return on investment (ROI) of at least 35% on your money – and much more if you believe Wall Street analysts – is well worth it.

As of the publication date, Mark Hake does not hold (directly or indirectly) any positions in any of the stocks mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.

Mark Hake writes about personal finance on mrhake.medium.com and run the Total Value of Return Guide that you can consult here.