Nuveen LLC Acquires New Shares in Southwest Airlines Co. (NYSE:LUV)

Key Points

• Nuveen LLC has acquired a new stake in Southwest Airlines, purchasing 1,501,862 shares valued at approximately $50.4 million, which amounts to about 0.26% ownership as per the latest SEC filing.
• Southwest Airlines recently announced a quarterly dividend of $0.18 per share, indicating a payout ratio of 109.09%, and will commence a $2 billion stock buyback program aimed at repurchasing up to 9.4% of its shares.
• The airline reported earnings per share of $0.43 for the last quarter, missing estimates, with a net margin of only 1.43% and forecasting 1.55 EPS for the current year.

Nuveen LLC acquired a new stake in Southwest Airlines Co. (NYSE:LUV - Free Report) in the first quarter, according to the company in its most recent 13F filing with the SEC. The institutional investor acquired 1,501,862 shares of the airline's stock, valued at approximately $50,433,000. Nuveen LLC owned approximately 0.26% of Southwest Airlines as of its most recent SEC filing.

A number of other large investors have also made changes to their positions in LUV. Jacobs Levy Equity Management Inc. increased its position in shares of Southwest Airlines by 66.0% in the 4th quarter. Jacobs Levy Equity Management Inc. now owns 6,014,828 shares of the airline's stock valued at $202,219,000 after buying an additional 2,391,495 shares in the last quarter. Jefferies Financial Group Inc. increased its position in shares of Southwest Airlines by 2,857.9% in the 4th quarter. Jefferies Financial Group Inc. now owns 1,013,657 shares of the airline's stock valued at $34,079,000 after buying an additional 979,388 shares in the last quarter. Primecap Management Co. CA increased its position in shares of Southwest Airlines by 1.6% in the 1st quarter. Primecap Management Co. CA now owns 49,688,308 shares of the airline's stock valued at $1,668,533,000 after buying an additional 788,255 shares in the last quarter. WS Management Lllp bought a new position in Southwest Airlines during the 4th quarter worth about $20,172,000. Finally, Kettle Hill Capital Management LLC bought a new position in Southwest Airlines during the 4th quarter worth about $15,904,000. Institutional investors own 80.82% of the company's stock.

Southwest Airlines Trading Down 0.6%

Shares of NYSE:LUV opened at $30.78 on Friday. Southwest Airlines Co. has a 52-week low of $23.82 and a 52-week high of $37.96. The company has a market capitalization of $16.17 billion, a P/E ratio of 46.64, a price-to-earnings-growth ratio of 0.80 and a beta of 1.26. The company has a 50-day simple moving average of $32.97 and a 200 day simple moving average of $31.13. The company has a debt-to-equity ratio of 0.51, a quick ratio of 0.49 and a current ratio of 0.56.

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). Southwest Airlines had a net margin of 1.43% and a return on equity of 6.27%. The firm had revenue of $7.24 billion during the quarter, compared to analyst estimates of $7.30 billion. During the same quarter last year, the business posted $0.58 earnings per share. The company's revenue for the quarter was down 2.1% on a year-over-year basis. Sell-side analysts forecast that Southwest Airlines Co. will post 1.55 earnings per share for the current year.

Southwest Airlines Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 24th. Shareholders of record on Wednesday, September 3rd will be given 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 (DPR) is 109.09%.

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

Analysts Set New Price Targets

A number of equities analysts have issued reports on LUV shares. Deutsche Bank Aktiengesellschaft upgraded Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 target price for the company in a report on Thursday, May 29th. Raymond James Financial reiterated an "outperform" rating and set a $40.00 target price (down previously from $42.00) on shares of Southwest Airlines in a report on Tuesday, April 29th. Barclays increased their target price on Southwest Airlines from $26.00 to $34.00 and gave the stock an "equal weight" rating in a report on Thursday, July 10th. HSBC cut Southwest Airlines from a "hold" rating to a "reduce" rating in a report on Thursday, July 24th. Finally, Evercore ISI lowered their target price on Southwest Airlines from $40.00 to $34.00 and set an "in-line" rating for the company in a report on Friday, July 25th. Seven research analysts have rated the stock with a sell rating, nine have assigned a hold rating and four have issued a buy rating to the company. According to MarketBeat, the stock presently has an average rating of "Hold" and a consensus target price of $33.06.

Insider Activity at Southwest Airlines

In related news, Director Sarah Feinberg acquired 1,500 shares of the business's stock in a transaction on Tuesday, August 5th. The stock was purchased 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 of the company's stock, valued at approximately $427,012.29. The trade was a 11.78% increase in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, Director Gregg A. Saretsky acquired 3,345 shares of the business's stock in a transaction on Wednesday, August 6th. The shares were bought at an average price of $30.03 per share, with a total value of $100,450.35. Following the completion of the transaction, the director directly 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. Company 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.

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