National Bank of Canada FI Sells 2,470,888 Shares of Southwest Airlines Co. (NYSE:LUV)

Key Points

• National Bank of Canada FI significantly reduced its stake in Southwest Airlines by 87.0%, selling over 2.4 million shares and retaining just 369,641 shares worth approximately $12.4 million.
• Southwest Airlines reported a quarterly earnings miss with earnings of $0.43 per share, falling short of the $0.51 expected by analysts, alongside a revenue decline of 2.1% year-over-year.
• The Board of Directors at Southwest Airlines announced a $2.00 billion stock repurchase program, allowing the company to buy back up to 9.4% of its shares, indicating confidence in its stock's valuation.

National Bank of Canada FI cut its position in Southwest Airlines Co. (NYSE:LUV - Free Report) by 87.0% during the first quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The institutional investor owned 369,641 shares of the airline's stock after selling 2,470,888 shares during the period. National Bank of Canada FI owned 0.06% of Southwest Airlines worth $12,413,000 as of its most recent SEC filing.

A number of other institutional investors and hedge funds have also recently added to or reduced their stakes in LUV. Envestnet Asset Management Inc. boosted its position in Southwest Airlines by 26.2% in the fourth quarter. Envestnet Asset Management Inc. now owns 347,826 shares of the airline's stock valued at $11,694,000 after buying an additional 72,281 shares in the last quarter. Renaissance Technologies LLC boosted its position in Southwest Airlines by 98.0% in the fourth quarter. Renaissance Technologies LLC now owns 219,380 shares of the airline's stock valued at $7,376,000 after buying an additional 108,600 shares in the last quarter. Raymond James Financial Inc. acquired a new position in Southwest Airlines in the fourth quarter valued at about $40,541,000. Treasurer of the State of North Carolina raised its stake 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 acquiring an additional 1,180 shares during the last quarter. Finally, Sterling Capital Management LLC raised its stake 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 acquiring an additional 12,633 shares during the last quarter. 80.82% of the stock is currently owned by institutional investors and hedge funds.

Analyst Ratings Changes

LUV has been the subject of a number of research analyst reports. HSBC downgraded shares of Southwest Airlines from a "hold" rating to a "reduce" rating in a research note on Thursday, July 24th. Raymond James Financial reissued an "outperform" rating and set a $40.00 price target (down from $42.00) on shares of Southwest Airlines in a research note on Tuesday, April 29th. 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 note on Thursday, July 10th. Jefferies Financial Group raised shares of Southwest Airlines from an "underperform" rating to a "hold" rating and upped their target price for the company from $24.00 to $33.00 in a research note on Tuesday, May 27th. Finally, UBS Group upped their target price on shares of Southwest Airlines from $27.00 to $34.00 and gave the company a "neutral" rating in a research note on Monday, July 7th. Seven research analysts have rated the stock with a sell rating, nine have assigned a hold rating and four have given a buy rating to the company. Based on data from MarketBeat, Southwest Airlines has a consensus rating of "Hold" and an average price target of $33.06.

Southwest Airlines Stock Up 2.6%

Shares of Southwest Airlines stock traded up $0.80 on Friday, hitting $31.50. The company had a trading volume of 7,881,314 shares, compared to its average volume of 12,073,395. The firm has a market capitalization of $16.54 billion, a P/E ratio of 47.73, a P/E/G ratio of 0.80 and a beta of 1.26. Southwest Airlines Co. has a twelve month low of $23.82 and a twelve month high of $37.96. The company has a debt-to-equity ratio of 0.51, a current ratio of 0.56 and a quick ratio of 0.49. The stock has a 50-day moving average of $32.93 and a 200-day moving average of $31.13.

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

Southwest Airlines Announces Dividend

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

Southwest Airlines announced that its Board of Directors has approved a share repurchase plan on Wednesday, July 23rd that permits the company to repurchase $2.00 billion in shares. This repurchase authorization permits the airline to buy up to 9.4% of its stock through open market purchases. Stock repurchase plans are typically an indication that the company's board of directors believes its stock is undervalued.

Insider Buying and Selling at Southwest Airlines

In other Southwest Airlines news, Director Sarah Feinberg bought 1,500 shares of Southwest Airlines stock in a transaction that occurred on Tuesday, August 5th. The stock was acquired at an average price of $30.01 per share, for a total transaction of $45,015.00. Following the completion of the acquisition, the director owned 14,229 shares of the company's stock, valued at $427,012.29. This trade represents a 11.78% increase in their position. The purchase was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Also, Director Gregg A. Saretsky purchased 3,345 shares of the business's stock in a transaction on Wednesday, August 6th. The stock was purchased at an average price of $30.03 per share, with a total value of $100,450.35. Following the purchase, the director owned 23,644 shares of the company's stock, 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. Corporate insiders own 0.79% of the company's stock.

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.