Charles Schwab Investment Management Inc. Increases Holdings in 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. grew its stake in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) by 3.9% during the first quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 3,602,939 shares of the airline's stock after buying an additional 136,410 shares during the quarter. Charles Schwab Investment Management Inc. owned 0.63% of Southwest Airlines worth $120,987,000 at the end of the most recent quarter.

Several other large investors also recently modified their holdings of the business. CWC Advisors LLC. grew its stake in shares of Southwest Airlines by 2.4% in 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 grew 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 purchasing an additional 337 shares during the last quarter. PNC Financial Services Group Inc. grew 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 purchasing an additional 345 shares during the last quarter. MassMutual Private Wealth & Trust FSB grew 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 purchasing an additional 391 shares during the last quarter. Finally, Forum Financial Management LP grew its stake in shares of Southwest Airlines by 2.4% in the first quarter. Forum Financial Management LP now owns 16,998 shares of the airline's stock worth $571,000 after purchasing an additional 399 shares during the last quarter. 80.82% of the stock is owned by institutional investors.

Wall Street Analyst Weigh In

LUV has been the topic of several recent analyst reports. Hsbc Global Res raised Southwest Airlines to a "moderate sell" rating in a research note on Thursday, July 24th. HSBC cut Southwest Airlines from a "hold" rating to a "reduce" rating in a research report on Thursday, July 24th. Raymond James Financial reaffirmed an "outperform" rating and set a $40.00 price objective (down from $42.00) on shares of Southwest Airlines in a research report on Tuesday, April 29th. Wall Street Zen cut Southwest Airlines from a "hold" rating to a "sell" rating in a research report on Saturday, July 26th. Finally, Deutsche Bank Aktiengesellschaft raised Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 price objective on the stock in a research report on Thursday, May 29th. Seven analysts have rated the stock with a sell rating, nine have issued a hold rating and four have assigned a buy rating to the stock. According to data from MarketBeat, Southwest Airlines currently has a consensus rating of "Hold" and an average price target of $33.06.

Insider Buying and Selling

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

Southwest Airlines Stock Up 2.6%

Southwest Airlines stock traded up $0.80 during mid-day trading on Friday, reaching $31.50. The stock had a trading volume of 7,881,314 shares, compared to its average volume of 12,073,395. Southwest Airlines Co. has a one year low of $23.82 and a one year high of $37.96. The company has a 50-day moving average price of $32.93 and a two-hundred day moving average price of $31.13. The company has a market capitalization of $16.54 billion, a price-to-earnings ratio of 47.73, a PEG ratio of 0.80 and a beta of 1.26. The company has a debt-to-equity ratio of 0.51, a current ratio of 0.56 and a quick ratio of 0.49.

Southwest Airlines (NYSE:LUV - Get Free Report) last issued its earnings results on Wednesday, July 23rd. The airline reported $0.43 earnings per share (EPS) for the quarter, missing the consensus estimate 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 return on equity of 6.27% and a net margin of 1.43%. The firm's quarterly revenue was down 2.1% on a year-over-year basis. During the same period last year, the firm posted $0.58 earnings per share. On average, analysts expect that Southwest Airlines Co. will post 1.55 EPS for the current fiscal year.

Southwest Airlines Announces Dividend

The company also recently disclosed 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. 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 payout ratio is presently 109.09%.

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

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.