PDT Partners LLC Acquires Shares of 111,619 Southwest Airlines Co. $LUV

Key Points

• PDT Partners LLC has acquired a new stake in Southwest Airlines Co., purchasing 111,619 shares valued at approximately $3.75 million during the first quarter of 2023.
• Southwest Airlines recently reported quarterly earnings of $0.43 per share, missing analysts' expectations, and had a revenue of $7.24 billion, which is down 2.1% compared to the previous year.
• The company's Board of Directors has approved a $2 billion stock buyback plan, signaling confidence in the stock's valuation, while also declaring a quarterly dividend of $0.18 per share.

PDT Partners LLC acquired a new stake in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) during the first quarter, according to its most recent disclosure with the SEC. The fund acquired 111,619 shares of the airline's stock, valued at approximately $3,748,000.

A number of other large investors have also recently made changes to their positions in LUV. Jacobs Levy Equity Management Inc. lifted its position in shares of Southwest Airlines by 66.0% during 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. Nuveen LLC purchased a new position in Southwest Airlines in the 1st quarter worth approximately $50,433,000. Jefferies Financial Group Inc. lifted its holdings in 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 worth $34,079,000 after purchasing an additional 979,388 shares in the last quarter. Primecap Management Co. CA lifted its holdings in Southwest Airlines by 1.6% in the 1st quarter. Primecap Management Co. CA now owns 49,688,308 shares of the airline's stock worth $1,668,533,000 after purchasing an additional 788,255 shares in the last quarter. Finally, WS Management Lllp purchased a new position in Southwest Airlines in the 4th quarter worth approximately $20,172,000. 80.82% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

LUV has been the topic of a number of research analyst reports. Wall Street Zen cut Southwest Airlines from a "hold" rating to a "sell" rating in a report on Saturday, July 26th. Barclays boosted their price target on Southwest Airlines from $26.00 to $34.00 and gave the stock an "equal weight" rating in a report on Thursday, July 10th. Evercore ISI lowered their price target on Southwest Airlines from $40.00 to $34.00 and set an "in-line" rating on the stock in a report on Friday, July 25th. Jefferies Financial Group raised Southwest Airlines from an "underperform" rating to a "hold" rating and boosted their price target for the stock from $24.00 to $33.00 in a report on Tuesday, May 27th. Finally, UBS Group boosted their price target on Southwest Airlines from $27.00 to $34.00 and gave the stock a "neutral" rating in a report on Monday, July 7th. Four analysts have rated the stock with a Buy rating, nine have issued a Hold rating and six have given a Sell rating to the company. According to data from MarketBeat.com, the company currently has a consensus rating of "Reduce" and an average target price of $33.06.

Southwest Airlines Trading Up 0.8%

Shares of NYSE LUV traded up $0.24 during trading hours on Friday, hitting $31.36. 8,026,881 shares of the company traded hands, compared to its average volume of 6,645,707. The stock has a market capitalization of $16.47 billion, a price-to-earnings ratio of 47.52, a price-to-earnings-growth ratio of 0.81 and a beta of 1.19. The company has a current ratio of 0.56, a quick ratio of 0.49 and a debt-to-equity ratio of 0.51. The company's 50 day moving average price is $32.96 and its 200 day moving average price is $31.30. Southwest Airlines Co. has a 12 month low of $23.82 and a 12 month high of $37.96.

Southwest Airlines (NYSE:LUV - Get Free Report) last released its 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 for the quarter, compared to the consensus estimate of $7.30 billion. Southwest Airlines had a net margin of 1.43% and a return on equity of 6.27%. The business's revenue for the quarter was down 2.1% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.58 EPS. On average, equities research analysts anticipate that Southwest Airlines Co. will post 1.55 earnings per share for the current fiscal year.

Southwest Airlines Announces Dividend

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

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

Insider Activity at Southwest Airlines

In related news, Director Gregg A. Saretsky bought 3,345 shares of the business's stock in a transaction dated Wednesday, August 6th. The shares were purchased at an average price of $30.03 per share, with a total value of $100,450.35. Following the transaction, the director owned 23,644 shares in the company, valued at $710,029.32. This trade represents a 16.48% increase in their position. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, Director Sarah Feinberg bought 1,500 shares of the business's stock in a transaction dated Tuesday, August 5th. The shares were bought at an average cost of $30.01 per share, for a total transaction of $45,015.00. Following the transaction, the director owned 14,229 shares in the company, valued at approximately $427,012.29. The trade was a 11.78% increase in their position. The disclosure for this purchase can be found here. Insiders own 0.79% of the company's stock.

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.