JP Morgan keeps underweight on UAL Corp. (UAL).
The parent of United Airlines failed to secure a $1.8 billion federal government loan guarantee. Analyst Jamie Baker says he had anticipated that the government would reject the loan application, all but ensuring a Chapter 11 filing by the carrier.
Baker says he expects shares to be essentially worthless by end of month. He also says there are no changes to his estimates, however, his revision bias is likely to be upward should the company reduce capacity more than it had planned.
Baker expects shares in competing airlines to react positively, reflecting that what's bad for UAL is good for the airline industry.