Wall Street Zen Downgrades Southwest Airlines (NYSE:LUV) to Hold

Key Points

• Wall Street Zen downgraded Southwest Airlines from “Buy” to “Hold.” The broader analyst consensus is also “Hold,” with nine Buy, nine Hold, and four Sell ratings and an average price target of $49.01.
• Southwest reported quarterly earnings of $0.94 per share, exceeding the $0.52 consensus estimate, while revenue reached $8.72 billion versus expectations of $8.58 billion.
• Southwest shares opened at $39.64, with the stock up 2.3%; institutional investors and hedge funds own approximately 80.82% of the company’s shares.

Southwest Airlines (NYSE:LUV - Get Free Report) was downgraded by equities research analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a research report issued to clients and investors on Saturday, Wall Street Zen reports.

Other research analysts also recently issued research reports about the stock. JPMorgan Chase & Co. decreased their price target on shares of Southwest Airlines from $60.00 to $59.00 and set an "overweight" rating for the company in a research note on Friday, July 24th. Morgan Stanley raised their price objective on shares of Southwest Airlines from $60.00 to $65.00 and gave the company an "overweight" rating in a report on Monday, July 6th. Zacks Research upgraded shares of Southwest Airlines from a "strong sell" rating to a "hold" rating in a research note on Thursday, June 25th. Wells Fargo & Company raised their price target on Southwest Airlines from $44.00 to $50.00 and gave the company an "equal weight" rating in a research note on Tuesday, June 30th. Finally, UBS Group lifted their price target on Southwest Airlines from $53.00 to $61.00 and gave the stock a "buy" rating in a report on Tuesday, June 23rd. Nine equities research analysts have rated the stock with a Buy rating, nine have given a Hold rating and four have assigned a Sell rating to the company's stock. Based on data from MarketBeat, Southwest Airlines currently has an average rating of "Hold" and a consensus price target of $49.01.

Southwest Airlines Stock Up 2.3%

Shares of NYSE LUV opened at $39.64 on Friday. The company has a quick ratio of 0.42, a current ratio of 0.49 and a debt-to-equity ratio of 0.54. The business's 50 day moving average is $45.39 and its two-hundred day moving average is $43.65. Southwest Airlines has a 52-week low of $29.26 and a 52-week high of $55.11. The firm has a market cap of $19.39 billion, a price-to-earnings ratio of 24.32, a PEG ratio of 0.36 and a beta of 1.13.

Southwest Airlines (NYSE:LUV - Get Free Report) last posted its quarterly earnings results on Wednesday, July 22nd. The airline reported $0.94 EPS for the quarter, topping the consensus estimate of $0.52 by $0.42. The business had revenue of $8.72 billion during the quarter, compared to the consensus estimate of $8.58 billion. Southwest Airlines had a net margin of 2.78% and a return on equity of 14.15%. The company's quarterly revenue was up 16.4% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $0.43 earnings per share. Southwest Airlines has set its FY 2026 guidance at 3.250-4.250 EPS and its Q3 2026 guidance at 0.500-0.750 EPS. Research analysts predict that Southwest Airlines will post 3.28 EPS for the current year.

Institutional Trading of Southwest Airlines

Institutional investors and hedge funds have recently made changes to their positions in the company. SHP Wealth Management acquired a new position in Southwest Airlines in the 4th quarter valued at about $25,000. Entrust Financial LLC purchased a new position in Southwest Airlines during the 4th quarter worth $26,000. Los Angeles Capital Management LLC acquired a new stake in shares of Southwest Airlines in the 4th quarter worth $26,000. Scarborough Advisors LLC acquired a new stake in shares of Southwest Airlines in the 1st quarter worth $28,000. Finally, DV Equities LLC purchased a new stake in shares of Southwest Airlines in the fourth quarter valued at about $30,000. 80.82% of the stock is owned by hedge funds and other institutional investors.

About Southwest Airlines

Southwest Airlines Co is a U.S.-based low-cost carrier that operates a point-to-point domestic and near-international airline network. Headquartered in Dallas, Texas, the company primarily flies Boeing 737 aircraft and offers no-frills, single-class service designed to keep fares competitive. Southwest's operating model emphasizes high aircraft utilization, quick turnaround times and an open seating policy, allowing customers to board and select seats on a first-come, first-served basis.

Founded in 1967 by Herb Kelleher and Rollin King as Air Southwest Company, Southwest began commercial service in 1971, initially connecting Dallas, Houston and San Antonio.

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