Southwest Airlines (LUV) Upgraded at Zacks Investment Research

Southwest Airlines (NYSE:LUV) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a report issued on Friday. The brokerage presently has a $55.00 price target on the airline’s stock. Zacks Investment Research‘s target price would indicate a potential upside of 14.46% from the stock’s previous close.

According to Zacks, “Fuel costs have been on a downward trend lately. In fact, oil prices registered their steepest monthly drop, in a decade, in November. This bodes well for airline stocks including Southwest. Taking advantage of the low oil price scenario, Southwest trimmed its forecast for the fourth quarter of 2018. Detailed results will be out on Jan 24. The Zacks Consensus Estimate for fourth-quarter earnings increased 1.9% over the last 60 days. This highlights the positivity surrounding the stock. Moreover, the carrier's efforts to reward shareholders are impressive. Furthermore, efforts to modernize its fleet are praiseworthy. Southwest is constantly adding more efficient planes to its fleet and removing outdated ones. However, capacity-related woes also do not bode well for Southwest. In fact, load factor has declined for eight consecutive months due to capacity overexpansion. Fourth-quarter capacity is likely to expand between 6% and 6.5%.”

Several other equities analysts have also recently issued reports on the company. Cowen cut Southwest Airlines from an “outperform” rating to a “market perform” rating and reduced their price objective for the stock from $65.00 to $54.00 in a research note on Thursday. Imperial Capital restated an “in-line” rating and set a $52.00 price objective (down from $57.00) on shares of Southwest Airlines in a research note on Wednesday. Wolfe Research upgraded Southwest Airlines from a “market perform” rating to an “outperform” rating in a research note on Friday, December 7th. Citigroup raised their price objective on Southwest Airlines from $59.00 to $62.00 and gave the stock a “buy” rating in a research note on Thursday, November 29th. Finally, Susquehanna Bancshares assumed coverage on Southwest Airlines in a research note on Wednesday, November 28th. They set a “neutral” rating and a $56.00 price objective on the stock. One analyst has rated the stock with a sell rating, seven have issued a hold rating and fourteen have issued a buy rating to the company’s stock. Southwest Airlines has a consensus rating of “Buy” and an average target price of $61.56.

Southwest Airlines stock opened at $48.05 on Friday. The company has a market cap of $27.60 billion, a PE ratio of 13.73, a price-to-earnings-growth ratio of 0.92 and a beta of 1.31. The company has a debt-to-equity ratio of 0.47, a current ratio of 0.71 and a quick ratio of 0.65. Southwest Airlines has a 52 week low of $44.28 and a 52 week high of $66.52.

Southwest Airlines (NYSE:LUV) last released its earnings results on Thursday, October 25th. The airline reported $1.08 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $1.06 by $0.02. Southwest Airlines had a return on equity of 22.27% and a net margin of 17.18%. The company had revenue of $5.58 billion during the quarter, compared to analysts’ expectations of $5.56 billion. During the same period in the prior year, the business posted $0.88 EPS. As a group, analysts forecast that Southwest Airlines will post 4.13 earnings per share for the current year.

In other news, Director John T. Montford sold 980 shares of the firm’s stock in a transaction on Wednesday, December 12th. The stock was sold at an average price of $51.27, for a total transaction of $50,244.60. Following the transaction, the director now directly owns 20,983 shares of the company’s stock, valued at $1,075,798.41. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, Director John T. Montford sold 956 shares of the firm’s stock in a transaction on Monday, November 19th. The shares were sold at an average price of $52.35, for a total value of $50,046.60. The disclosure for this sale can be found here. 0.23% of the stock is owned by company insiders.

Institutional investors and hedge funds have recently modified their holdings of the company. Flagship Harbor Advisors LLC bought a new position in Southwest Airlines during the second quarter valued at about $101,000. Point72 Hong Kong Ltd bought a new position in Southwest Airlines during the second quarter valued at about $108,000. TRUE Private Wealth Advisors bought a new position in Southwest Airlines during the third quarter valued at about $111,000. Northwest Wealth Management LLC boosted its stake in Southwest Airlines by 357.1% during the third quarter. Northwest Wealth Management LLC now owns 1,920 shares of the airline’s stock valued at $120,000 after buying an additional 1,500 shares in the last quarter. Finally, Girard Partners LTD. bought a new position in Southwest Airlines during the third quarter valued at about $126,000. 79.43% of the stock is currently owned by institutional investors.

Southwest Airlines Company Profile

Southwest Airlines Co operates a passenger airline that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2017, the company operated a total of 706 Boeing 737 aircraft; and served 100 destinations in 40 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as 10 near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.

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