Elliott Investment Management L.P. Sells 5,688,000 Shares of Southwest Airlines Co. $LUV

Key Points

• Elliott Investment Management L.P. reduced its stake in Southwest Airlines by 5,688,000 shares, resulting in a 9.5% decrease, but it remains the fund's fourth-largest holding.
• Several institutional investors have recently either initiated or increased their positions in Southwest Airlines, with institutional ownership now at approximately 80.82%.
• Southwest Airlines announced a quarterly $0.18 dividend and also approved a $2 billion share buyback plan, indicating potential confidence in the stock's value.

Elliott Investment Management L.P. trimmed its position in Southwest Airlines Co. (NYSE:LUV - Free Report) by 9.5% during the 1st quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The fund owned 53,978,500 shares of the airline's stock after selling 5,688,000 shares during the period. Southwest Airlines comprises about 12.0% of Elliott Investment Management L.P.'s portfolio, making the stock its 4th largest holding. Elliott Investment Management L.P. owned approximately 9.47% of Southwest Airlines worth $1,812,598,000 at the end of the most recent reporting period.

A number of other institutional investors have also bought and sold shares of LUV. Pandora Wealth Inc. purchased a new position in Southwest Airlines in the 1st quarter worth approximately $34,000. Cheviot Value Management LLC purchased a new position in Southwest Airlines in the 1st quarter worth approximately $42,000. Quent Capital LLC lifted its stake in Southwest Airlines by 78.6% in the 1st quarter. Quent Capital LLC now owns 1,472 shares of the airline's stock worth $49,000 after purchasing an additional 648 shares in the last quarter. Brooklyn Investment Group lifted its stake in Southwest Airlines by 122.3% in the 1st quarter. Brooklyn Investment Group now owns 1,787 shares of the airline's stock worth $60,000 after purchasing an additional 983 shares in the last quarter. Finally, MassMutual Private Wealth & Trust FSB lifted its stake in Southwest Airlines by 22.1% in the 1st 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 in the last quarter. 80.82% of the stock is owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

LUV has been the topic of a number of research reports. Hsbc Global Res raised shares of Southwest Airlines to a "moderate sell" rating in a research note on Thursday, July 24th. Wall Street Zen lowered shares of Southwest Airlines from a "hold" rating to a "sell" rating in a research report on Saturday, July 26th. UBS Group lifted their price target on shares of Southwest Airlines from $27.00 to $34.00 and gave the company a "neutral" rating in a research report on Monday, July 7th. Susquehanna lifted their price target on shares of Southwest Airlines from $25.00 to $30.00 and gave the company a "neutral" rating in a research report on Tuesday, August 5th. Finally, Jefferies Financial Group raised shares of Southwest Airlines from an "underperform" rating to a "hold" rating and lifted their price target for the company from $24.00 to $33.00 in a research report on Tuesday, May 27th. Four analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and six have assigned a Sell rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of "Reduce" and a consensus price target of $33.06.

Insiders Place Their Bets

In related news, Director Sarah Feinberg purchased 1,500 shares of Southwest Airlines stock in a transaction that occurred on Tuesday, August 5th. The stock was purchased at an average cost of $30.01 per share, with a total value of $45,015.00. Following the completion of the transaction, the director directly owned 14,229 shares in the company, valued at approximately $427,012.29. The trade was a 11.78% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director Gregg A. Saretsky purchased 3,345 shares of the company's stock in a transaction that occurred on Wednesday, August 6th. The stock was bought at an average price 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 $710,029.32. This trade represents 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 insiders.

Southwest Airlines Stock Down 3.8%

NYSE LUV traded down $1.22 on Thursday, hitting $31.12. 10,488,607 shares of the stock were exchanged, compared to its average volume of 11,430,090. The company has a market cap of $16.34 billion, a PE ratio of 47.14, a PEG ratio of 0.85 and a beta of 1.19. The company has a 50-day moving average price of $32.98 and a 200-day moving average price of $31.29. Southwest Airlines Co. has a fifty-two week low of $23.82 and a fifty-two week high of $37.96. The company has a quick ratio of 0.49, a current ratio of 0.56 and a debt-to-equity ratio of 0.51.

Southwest Airlines (NYSE:LUV - Get Free Report) last released its quarterly earnings data 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 for 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%.Southwest Airlines's revenue for the quarter was down 2.1% on a year-over-year basis. During the same period last year, the firm posted $0.58 earnings per share. Sell-side analysts anticipate that Southwest Airlines Co. will post 1.55 EPS for the current fiscal year.

Southwest Airlines Announces Dividend

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 given 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 2.3%. Southwest Airlines's payout ratio is 109.09%.

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

Southwest Airlines 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.