Canada Pension Plan Investment Board Raises Stake in Southwest Airlines Co. $LUV

Key Points

• The Canada Pension Plan Investment Board increased its stake in Southwest Airlines by 407%, acquiring an additional 241,228 shares, bringing its total ownership to approximately 300,491 shares valued at about $10.09 million.
• Analysts have upgraded their ratings for Southwest Airlines, with Deutsche Bank moving from a "hold" to a "buy" rating and setting a target price of $40.00, while the average target price across analysts is $33.06.
• Southwest Airlines announced a quarterly dividend of $0.18 per share, with a payout ratio of 109.09%, and a new share buyback program authorizing $2 billion in repurchases.

Canada Pension Plan Investment Board lifted its position in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) by 407.0% during the 1st quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 300,491 shares of the airline's stock after purchasing an additional 241,228 shares during the period. Canada Pension Plan Investment Board owned about 0.05% of Southwest Airlines worth $10,090,000 as of its most recent filing with the Securities and Exchange Commission.

Several other hedge funds and other institutional investors also recently made changes to their positions in the company. CWC Advisors LLC. grew its holdings in shares of Southwest Airlines by 2.4% during the fourth quarter. CWC Advisors LLC. now owns 13,310 shares of the airline's stock worth $447,000 after purchasing an additional 311 shares during the last quarter. Copperwynd Financial LLC lifted its stake in shares of Southwest Airlines by 2.1% in the first quarter. Copperwynd Financial LLC now owns 16,301 shares of the airline's stock worth $547,000 after acquiring an additional 337 shares during the period. PNC Financial Services Group Inc. lifted its stake in shares of Southwest Airlines by 0.5% in the first quarter. PNC Financial Services Group Inc. now owns 76,719 shares of the airline's stock worth $2,576,000 after acquiring an additional 345 shares during the period. Horizon Investments LLC lifted its stake in shares of Southwest Airlines by 4.5% in the first quarter. Horizon Investments LLC now owns 8,590 shares of the airline's stock worth $288,000 after acquiring an additional 369 shares during the period. Finally, MassMutual Private Wealth & Trust FSB lifted its stake in shares of Southwest Airlines by 22.1% in the first quarter. MassMutual Private Wealth & Trust FSB now owns 2,161 shares of the airline's stock worth $73,000 after acquiring an additional 391 shares during the period. 80.82% of the stock is currently owned by institutional investors.

Insiders Place Their Bets

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

Southwest Airlines Stock Up 0.8%

Southwest Airlines stock traded up $0.24 during trading on Friday, hitting $31.36. 8,026,881 shares of the company were exchanged, compared to its average volume of 6,645,707. The company has a market capitalization of $16.47 billion, a P/E ratio of 47.52, a PEG ratio of 0.81 and a beta of 1.19. The company has a current ratio of 0.56, a quick ratio of 0.49 and a debt-to-equity ratio of 0.51. The business's 50 day moving average is $32.96 and its 200 day moving average is $31.30. Southwest Airlines Co. has a 52 week low of $23.82 and a 52 week high of $37.96.

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

Southwest Airlines declared that its Board of Directors has approved a share repurchase plan on Wednesday, July 23rd that permits the company to buyback $2.00 billion in outstanding shares. This buyback authorization permits the airline to reacquire up to 9.4% of its shares through open market purchases. Shares buyback plans are often a sign that the company's board of directors believes its shares are undervalued.

Southwest Airlines Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 24th. Shareholders of record on Wednesday, September 3rd will be paid a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a yield of 2.3%. The ex-dividend date is Wednesday, September 3rd. Southwest Airlines's dividend payout ratio is 109.09%.

Analyst Ratings Changes

A number of equities analysts recently commented on LUV shares. UBS Group lifted their price objective on Southwest Airlines from $27.00 to $34.00 and gave the stock a "neutral" rating in a research note on Monday, July 7th. Susquehanna boosted their price target on Southwest Airlines from $25.00 to $30.00 and gave the company a "neutral" rating in a research note on Tuesday, August 5th. Wall Street Zen lowered Southwest Airlines from a "hold" rating to a "sell" rating in a research note on Saturday, July 26th. Barclays boosted their price target on Southwest Airlines from $26.00 to $34.00 and gave the company an "equal weight" rating in a research note on Thursday, July 10th. Finally, Hsbc Global Res raised Southwest Airlines to a "moderate sell" rating in a research note on Thursday, July 24th. 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. According to data from MarketBeat, the stock presently has an average rating of "Reduce" and a consensus price target of $33.06.

Southwest Airlines Company Profile

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.