Price T Rowe Associates Inc. MD Sells 2,810,612 Shares of Southwest Airlines Co. $LUV

Key Points

• Price T Rowe Associates Inc. reduced its stake in Southwest Airlines by 11%, selling over 2.8 million shares, leaving them with approximately 22.8 million shares worth about $767 million.
• Southwest Airlines recently declared a quarterly dividend of $0.18, representing a yield of 2.3%, and has authorized a $2 billion stock buyback program, which signals the board's belief that the stock is undervalued.
• Analysts have mixed reviews, with target prices ranging from $24 to $40; currently, the average target price stands at $33.06, indicating cautious sentiment towards the stock.

Price T Rowe Associates Inc. MD trimmed its holdings in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) by 11.0% in the first quarter, according to its most recent filing with the SEC. The firm owned 22,853,324 shares of the airline's stock after selling 2,810,612 shares during the period. Price T Rowe Associates Inc. MD owned approximately 4.01% of Southwest Airlines worth $767,416,000 as of its most recent filing with the SEC.

Other hedge funds and other institutional investors also recently made changes to their positions in the company. Jacobs Levy Equity Management Inc. raised its stake in shares of Southwest Airlines by 66.0% in the fourth quarter. Jacobs Levy Equity Management Inc. now owns 6,014,828 shares of the airline's stock valued at $202,219,000 after acquiring an additional 2,391,495 shares during the last quarter. Nuveen LLC bought a new position in shares of Southwest Airlines in the first quarter valued at approximately $50,433,000. Jefferies Financial Group Inc. raised its stake in shares of Southwest Airlines by 2,857.9% in the fourth quarter. Jefferies Financial Group Inc. now owns 1,013,657 shares of the airline's stock valued at $34,079,000 after acquiring an additional 979,388 shares during the last quarter. Primecap Management Co. CA raised its stake in shares of Southwest Airlines by 1.6% in the first quarter. Primecap Management Co. CA now owns 49,688,308 shares of the airline's stock valued at $1,668,533,000 after acquiring an additional 788,255 shares during the last quarter. Finally, WS Management Lllp bought a new position in shares of Southwest Airlines in the fourth quarter valued at approximately $20,172,000. 80.82% of the stock is owned by institutional investors.

Southwest Airlines Trading Down 0.7%

Shares of NYSE:LUV traded down $0.23 during trading on Monday, hitting $32.54. 7,783,202 shares of the company's stock were exchanged, compared to its average volume of 11,651,866. Southwest Airlines Co. has a 1-year low of $23.82 and a 1-year high of $37.96. The firm has a 50-day moving average price of $32.78 and a two-hundred day moving average price of $31.15. 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 firm has a market cap of $17.09 billion, a P/E ratio of 49.30, a PEG ratio of 0.85 and a beta of 1.26.

Southwest Airlines (NYSE:LUV - Get Free Report) last issued its quarterly earnings results on Wednesday, July 23rd. The airline reported $0.43 EPS for the quarter, missing the consensus estimate of $0.51 by ($0.08). Southwest Airlines had a return on equity of 6.27% and a net margin of 1.43%.The business had revenue of $7.24 billion for the quarter, compared to analyst estimates of $7.30 billion. During the same quarter in the prior year, the firm earned $0.58 EPS. The firm's quarterly revenue was down 2.1% compared to the same quarter last year. Equities analysts predict that Southwest Airlines Co. will post 1.55 earnings per share for the current year.

Southwest Airlines declared that its Board of Directors has authorized a share 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 shares through open market purchases. Shares repurchase plans are usually an indication that the company's board believes its stock is undervalued.

Southwest Airlines Dividend Announcement

The company also recently disclosed 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 dividend on an annualized basis and a yield of 2.2%. Southwest Airlines's payout ratio is currently 109.09%.

Insider Buying and Selling

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

Wall Street Analyst Weigh In

LUV has been the subject of a number of research analyst reports. Susquehanna lifted their target price on shares of Southwest Airlines from $25.00 to $30.00 and gave the company a "neutral" rating in a research note on Tuesday, August 5th. Barclays boosted their target price 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. Evercore ISI dropped their target price on shares of Southwest Airlines from $40.00 to $34.00 and set an "in-line" rating for the company in a research note on Friday, July 25th. HSBC downgraded shares of Southwest Airlines from a "hold" rating to a "reduce" rating in a research note on Thursday, July 24th. Finally, Raymond James Financial reaffirmed an "outperform" rating and issued a $40.00 target price (down from $42.00) on shares of Southwest Airlines in a research note on Tuesday, April 29th. Four research analysts have rated the stock with a Buy rating, nine have issued a Hold rating and six have assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, Southwest Airlines has a consensus rating of "Reduce" and an average target price of $33.06.

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.