Primecap Management Co. CA Has $1.67 Billion Position in Southwest Airlines Co. (NYSE:LUV)

Key Points

• Primecap Management Co. CA increased its stake in Southwest Airlines to 49.7 million shares, representing a 1.6% boost and making it the fund's 19th largest holding.
• Several institutional investors have recently adjusted their positions in Southwest Airlines, with a collective ownership of 80.82% of the stock by these entities.
• Southwest Airlines announced a $2 billion share buyback plan and recently reported quarterly earnings, missing revenue expectations and showing a year-over-year EPS decline.

Primecap Management Co. CA boosted its stake in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) by 1.6% in the 1st quarter, according to its most recent Form 13F filing with the SEC. The fund owned 49,688,308 shares of the airline's stock after purchasing an additional 788,255 shares during the period. Southwest Airlines accounts for about 1.4% of Primecap Management Co. CA's investment portfolio, making the stock its 19th biggest holding. Primecap Management Co. CA owned 8.72% of Southwest Airlines worth $1,668,533,000 as of its most recent filing with the SEC.

Several other large investors have also recently bought and sold shares of LUV. O Shaughnessy Asset Management LLC boosted its position in Southwest Airlines by 14.7% during the fourth quarter. O Shaughnessy Asset Management LLC now owns 16,744 shares of the airline's stock valued at $563,000 after purchasing an additional 2,140 shares during the last quarter. Landscape Capital Management L.L.C. acquired a new position in Southwest Airlines during the fourth quarter valued at approximately $268,000. Resona Asset Management Co. Ltd. acquired a new position in Southwest Airlines during the fourth quarter valued at approximately $1,675,000. Envestnet Asset Management Inc. boosted its position in Southwest Airlines by 26.2% during the fourth quarter. Envestnet Asset Management Inc. now owns 347,826 shares of the airline's stock valued at $11,694,000 after purchasing an additional 72,281 shares during the last quarter. Finally, Russell Investments Group Ltd. boosted its position in Southwest Airlines by 42.9% during the fourth quarter. Russell Investments Group Ltd. now owns 776,839 shares of the airline's stock valued at $26,117,000 after purchasing an additional 233,233 shares during the last quarter. 80.82% of the stock is owned by institutional investors and hedge funds.

Wall Street Analysts Forecast Growth

LUV has been the subject of a number of recent analyst reports. Citigroup cut their price objective on Southwest Airlines from $30.00 to $23.00 and set a "sell" rating for the company in a research report on Monday, April 14th. Hsbc Global Res raised Southwest Airlines to a "moderate sell" rating in a research report on Thursday, July 24th. Wall Street Zen cut Southwest Airlines from a "hold" rating to a "sell" rating in a research report on Saturday, July 26th. Jefferies Financial Group raised Southwest Airlines from an "underperform" rating to a "hold" rating and raised their price objective for the company from $24.00 to $33.00 in a research report on Tuesday, May 27th. Finally, Raymond James Financial reaffirmed an "outperform" rating and issued a $40.00 price objective (down from $42.00) on shares of Southwest Airlines in a research report on Tuesday, April 29th. Seven investment analysts have rated the stock with a sell rating, nine have issued a hold rating and four have given a buy rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and an average target price of $33.06.

Southwest Airlines Price Performance

Southwest Airlines stock opened at $29.94 on Wednesday. The stock's fifty day moving average price is $33.37 and its two-hundred day moving average price is $31.24. Southwest Airlines Co. has a one year low of $23.82 and a one year 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 firm has a market cap of $15.72 billion, a PE ratio of 45.36, a price-to-earnings-growth ratio of 0.74 and a beta of 1.26.

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

Southwest Airlines Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, September 24th. Shareholders 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 dividend yield of 2.4%. The ex-dividend date of this dividend is Wednesday, September 3rd. Southwest Airlines's dividend payout ratio (DPR) is currently 109.09%.

Southwest Airlines announced that its Board of Directors has authorized a share 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 generally an indication that the company's board 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.

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