Allstate Corp Makes New Investment in Southwest Airlines Co. $LUV

Key Points

• Allstate Corp has made a new investment in Southwest Airlines, purchasing 13,104 shares valued at approximately $440,000 in the first quarter.
• Southwest Airlines reported a net margin of 1.43% and a quarterly EPS of $0.43, missing analysts' estimates, along with a revenue decrease of 2.1% year-over-year.
• The company announced a $2 billion share buyback program, indicating management's belief that its stock is undervalued, and plans to pay a quarterly dividend of $0.18 per share.

Allstate Corp purchased a new stake in Southwest Airlines Co. (NYSE:LUV - Free Report) during the 1st quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm purchased 13,104 shares of the airline's stock, valued at approximately $440,000.

Several other hedge funds and other institutional investors have also made changes to their positions in the business. Jacobs Levy Equity Management Inc. raised its stake in Southwest Airlines by 66.0% during the 4th quarter. Jacobs Levy Equity Management Inc. now owns 6,014,828 shares of the airline's stock valued at $202,219,000 after acquiring an additional 2,391,495 shares in the last quarter. Nuveen LLC acquired a new position in shares of Southwest Airlines during the first quarter valued at $50,433,000. Jefferies Financial Group Inc. raised its stake in shares of Southwest Airlines by 2,857.9% during the fourth quarter. Jefferies Financial Group Inc. now owns 1,013,657 shares of the airline's stock valued at $34,079,000 after purchasing an additional 979,388 shares in the last quarter. Primecap Management Co. CA lifted its holdings in Southwest Airlines by 1.6% in the first quarter. Primecap Management Co. CA now owns 49,688,308 shares of the airline's stock worth $1,668,533,000 after purchasing an additional 788,255 shares during the period. Finally, WS Management Lllp bought a new position in Southwest Airlines in the 4th quarter valued at about $20,172,000. 80.82% of the stock is currently owned by institutional investors and hedge funds.

Southwest Airlines Trading Down 0.7%

Southwest Airlines stock opened at $32.54 on Tuesday. The firm has a market cap of $17.09 billion, a price-to-earnings ratio of 49.30, a price-to-earnings-growth ratio of 0.85 and a beta of 1.26. Southwest Airlines Co. has a 1 year low of $23.82 and a 1 year high of $37.96. The firm's 50 day moving average price is $32.78 and its two-hundred day moving average price is $31.16. The company has a debt-to-equity ratio of 0.51, a quick ratio of 0.49 and a current ratio of 0.56.

Southwest Airlines (NYSE:LUV - Get Free Report) last announced its quarterly earnings data on Wednesday, July 23rd. The airline reported $0.43 EPS for the quarter, missing analysts' consensus estimates of $0.51 by ($0.08). The company had revenue of $7.24 billion for the quarter, compared to analyst estimates of $7.30 billion. Southwest Airlines had a net margin of 1.43% and a return on equity of 6.27%. Southwest Airlines's revenue was down 2.1% on a year-over-year basis. During the same quarter last year, the company posted $0.58 EPS. On average, research analysts predict that Southwest Airlines Co. will post 1.55 EPS for the current fiscal year.

Southwest Airlines declared that its board has authorized a share buyback program on Wednesday, July 23rd that authorizes the company to repurchase $2.00 billion in outstanding shares. This repurchase authorization authorizes the airline to purchase up to 9.4% of its shares through open market purchases. Shares repurchase programs are typically a sign that the company's management believes its stock is undervalued.

Southwest Airlines Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Wednesday, September 24th. Investors of record on Wednesday, September 3rd will be paid a $0.18 dividend. The ex-dividend date of this dividend is Wednesday, September 3rd. This represents a $0.72 dividend on an annualized basis and a yield of 2.2%. Southwest Airlines's dividend payout ratio (DPR) is currently 109.09%.

Insider Activity

In related news, Director Gregg A. Saretsky acquired 3,345 shares of the company's stock in a transaction on Wednesday, August 6th. The shares were purchased at an average price of $30.03 per share, for a total transaction of $100,450.35. Following the purchase, the director owned 23,644 shares in the company, valued at $710,029.32. This represents a 16.48% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Sarah Feinberg bought 1,500 shares of the firm's stock in a transaction on Tuesday, August 5th. The shares were bought at an average cost of $30.01 per share, with a total value of $45,015.00. Following the purchase, the director directly owned 14,229 shares in the company, valued at approximately $427,012.29. This trade represents a 11.78% increase in their ownership of the stock. The disclosure for this purchase can be found here. 0.79% of the stock is currently owned by insiders.

Wall Street Analyst Weigh In

A number of research firms have commented on LUV. Barclays boosted their price target on shares of Southwest Airlines from $26.00 to $34.00 and gave the stock an "equal weight" rating in a research report on Thursday, July 10th. UBS Group boosted their target price on Southwest Airlines from $27.00 to $34.00 and gave the stock a "neutral" rating in a report on Monday, July 7th. Evercore ISI decreased their price target on Southwest Airlines from $40.00 to $34.00 and set an "in-line" rating for the company in a research note on Friday, July 25th. Raymond James Financial reiterated an "outperform" rating and set a $40.00 price target (down from $42.00) on shares of Southwest Airlines in a research report on Tuesday, April 29th. Finally, Susquehanna boosted their price objective on Southwest Airlines from $25.00 to $30.00 and gave the stock a "neutral" rating in a research note on Tuesday, August 5th. Four equities research analysts have rated the stock with a Buy rating, nine have given a Hold rating and six have assigned a Sell rating to the company's stock. According to data from MarketBeat.com, Southwest Airlines currently has a consensus rating of "Reduce" and a consensus target price of $33.06.

About Southwest Airlines

Southwest Airlines Co operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten 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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