Charles Schwab Investment Management Inc. Acquires 136,410 Shares of Southwest Airlines Co. (NYSE:LUV)

Key Points

• Charles Schwab Investment Management Inc. increased its holdings in Southwest Airlines by 3.9%, acquiring an additional 136,410 shares during the first quarter, bringing its total ownership to approximately 0.63% of the company.
• Southwest Airlines' recent quarterly earnings reported an EPS of $0.43, falling short of analysts' estimates by $0.08, with revenue down 2.1% year-over-year.
• The airline's board approved a $2.00 billion stock repurchase plan, signaling confidence in the company's undervaluation, alongside a declared quarterly dividend of $0.18 per share.

Charles Schwab Investment Management Inc. raised its holdings in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) by 3.9% during the first quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The firm owned 3,602,939 shares of the airline's stock after acquiring an additional 136,410 shares during the quarter. Charles Schwab Investment Management Inc. owned approximately 0.63% of Southwest Airlines worth $120,987,000 as of its most recent SEC filing.

A number of other institutional investors and hedge funds have also bought and sold shares of LUV. Envestnet Asset Management Inc. increased its holdings in shares of Southwest Airlines by 26.2% in the fourth quarter. Envestnet Asset Management Inc. now owns 347,826 shares of the airline's stock worth $11,694,000 after purchasing an additional 72,281 shares during the last quarter. Renaissance Technologies LLC increased its holdings in shares of Southwest Airlines by 98.0% in the fourth quarter. Renaissance Technologies LLC now owns 219,380 shares of the airline's stock worth $7,376,000 after purchasing an additional 108,600 shares during the last quarter. Raymond James Financial Inc. bought a new stake in shares of Southwest Airlines in the fourth quarter worth about $40,541,000. Treasurer of the State of North Carolina increased its holdings in shares of Southwest Airlines by 0.4% in the fourth quarter. Treasurer of the State of North Carolina now owns 269,736 shares of the airline's stock worth $9,069,000 after purchasing an additional 1,180 shares during the last quarter. Finally, Sterling Capital Management LLC increased its holdings in shares of Southwest Airlines by 55.5% in the fourth quarter. Sterling Capital Management LLC now owns 35,412 shares of the airline's stock worth $1,191,000 after purchasing an additional 12,633 shares during the last quarter. 80.82% of the stock is owned by institutional investors.

Southwest Airlines Stock Down 1.9%

Shares of NYSE LUV opened at $29.07 on Tuesday. The company has a debt-to-equity ratio of 0.51, a quick ratio of 0.49 and a current ratio of 0.56. The firm has a market capitalization of $15.27 billion, a price-to-earnings ratio of 44.05, a PEG ratio of 0.77 and a beta of 1.26. The stock has a 50 day moving average price of $33.07 and a 200 day moving average price of $31.15. 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 results 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 firm had revenue of $7.24 billion during the quarter, compared to analysts' expectations 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% on a year-over-year basis. During the same quarter in the previous year, the firm posted $0.58 EPS. Sell-side analysts expect that Southwest Airlines Co. will post 1.55 earnings per share for the current year.

Southwest Airlines declared that its board has initiated a stock repurchase plan on Wednesday, July 23rd that permits the company to repurchase $2.00 billion in outstanding shares. This repurchase authorization permits the airline to purchase up to 9.4% of its shares through open market purchases. Shares repurchase plans are often an indication that the company's board of directors believes its shares are undervalued.

Southwest Airlines Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Wednesday, September 24th. Investors of record on Wednesday, September 3rd will be issued a $0.18 dividend. The ex-dividend date is Wednesday, September 3rd. This represents a $0.72 dividend on an annualized basis and a dividend yield of 2.5%. Southwest Airlines's payout ratio is presently 109.09%.

Insider Buying and Selling

In other Southwest Airlines news, Director Gregg A. Saretsky acquired 3,345 shares of Southwest Airlines stock in a transaction that occurred on Wednesday, August 6th. The stock was bought at an average price of $30.03 per share, with a total value of $100,450.35. Following the completion of the purchase, the director directly owned 23,644 shares of the company's stock, valued at approximately $710,029.32. This represents a 16.48% increase in their position. The purchase was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director Sarah Feinberg acquired 1,500 shares of Southwest Airlines stock in a transaction that occurred on Tuesday, August 5th. The stock was acquired 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 of the company's stock, valued at $427,012.29. This 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.

Analyst Upgrades and Downgrades

Several equities research analysts have recently issued reports on the company. Raymond James Financial reaffirmed an "outperform" rating and issued a $40.00 target price (down from $42.00) on shares of Southwest Airlines in a report on Tuesday, April 29th. UBS Group lifted 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. Barclays lifted their price target on Southwest Airlines from $26.00 to $34.00 and gave the stock an "equal weight" rating in a research report on Thursday, July 10th. HSBC lowered Southwest Airlines from a "hold" rating to a "reduce" rating in a research report on Thursday, July 24th. Finally, Deutsche Bank Aktiengesellschaft upgraded Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 price target for the company in a research report on Thursday, May 29th. Seven analysts have rated the stock with a sell rating, nine have assigned a hold rating and four have assigned a buy rating to the stock. According to MarketBeat, the company has an average rating of "Hold" 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.

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