JPMorgan Chase & Co. Forecasts Strong Price Appreciation for Southwest Airlines (NYSE:LUV) Stock

Key Points

• JPMorgan Chase & Co. raised its target price for Southwest Airlines from $35.00 to $36.00, indicating a potential upside of 13.35%, although the stock currently holds an "underweight" rating.
• In addition to JPMorgan's report, other firms like UBS and HSBC have made adjustments to their target prices, with UBS giving a target of $34.00 and HSBC rating it as "reduce."
• Southwest Airlines announced a stock repurchase program worth $2.00 billion, allowing it to buy back up to 9.4% of its shares, suggesting the company believes its stock is currently undervalued.

Southwest Airlines (NYSE:LUV - Get Free Report) had its target price hoisted by equities research analysts at JPMorgan Chase & Co. from $35.00 to $36.00 in a research note issued to investors on Friday,Benzinga reports. The brokerage presently has an "underweight" rating on the airline's stock. JPMorgan Chase & Co.'s target price points to a potential upside of 13.35% from the company's current price.

Other analysts have also issued reports about the company. UBS Group lifted their price objective on Southwest Airlines from $27.00 to $34.00 and gave the stock a "neutral" rating in a research report on Monday, July 7th. Wall Street Zen downgraded shares of Southwest Airlines from a "hold" rating to a "sell" rating in a research note on Saturday, July 26th. Hsbc Global Res raised shares of Southwest Airlines to a "moderate sell" rating in a research note on Thursday, July 24th. HSBC cut Southwest Airlines from a "hold" rating to a "reduce" rating in a research note on Thursday, July 24th. Finally, Weiss Ratings restated a "hold (c)" rating on shares of Southwest Airlines in a research report on Wednesday, October 8th. Four analysts have rated the stock with a Buy rating, ten have issued a Hold rating and five have assigned a Sell rating to the stock. According to data from MarketBeat, the company presently has an average rating of "Reduce" and a consensus target price of $33.44.

Southwest Airlines Price Performance

LUV stock traded up $0.11 during trading on Friday, hitting $31.76. 1,626,519 shares of the stock traded hands, compared to its average volume of 11,112,707. The stock has a market cap of $16.68 billion, a price-to-earnings ratio of 48.79, a P/E/G ratio of 0.87 and a beta of 1.21. Southwest Airlines has a one year low of $23.82 and a one year high of $37.96. 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 has a 50 day simple moving average of $32.36 and a 200 day simple moving average of $31.60.

Southwest Airlines (NYSE:LUV - Get Free Report) last issued its quarterly earnings data on Tuesday, February 6th. The airline reported ($0.38) earnings per share (EPS) for the quarter. The business had revenue of $6.17 billion during the quarter. Southwest Airlines had a net margin of 1.38% and a return on equity of 6.14%. Equities analysts expect that Southwest Airlines will post 1.55 EPS for the current fiscal year.

Southwest Airlines declared that its board has authorized a stock repurchase program on Wednesday, July 23rd that permits the company to buyback $2.00 billion in shares. This buyback authorization permits the airline to repurchase up to 9.4% of its shares through open market purchases. Shares buyback programs are usually a sign that the company's board of directors believes its shares are undervalued.

Insider Buying and Selling

In other news, Director Gregg A. Saretsky bought 3,345 shares of the business's stock in a transaction on Wednesday, August 6th. The shares were purchased at an average price of $30.03 per share, for a total transaction 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 position. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director Sarah Feinberg purchased 1,500 shares of the firm's stock in a transaction dated Tuesday, August 5th. The shares were acquired at an average cost of $30.01 per share, with a total value of $45,015.00. Following the completion of the purchase, the director directly owned 14,229 shares in the company, valued at approximately $427,012.29. This represents a 11.78% increase in their ownership of the stock. The disclosure for this purchase can be found here. 0.79% of the stock is currently owned by company insiders.

Institutional Trading of Southwest Airlines

A number of hedge funds and other institutional investors have recently modified their holdings of LUV. GAMMA Investing LLC increased its position in shares of Southwest Airlines by 8.4% during the 1st quarter. GAMMA Investing LLC now owns 9,712 shares of the airline's stock worth $326,000 after purchasing an additional 749 shares during the last quarter. Asset Management One Co. Ltd. grew its position in shares of Southwest Airlines by 7.5% in the 1st quarter. Asset Management One Co. Ltd. now owns 70,410 shares of the airline's stock valued at $2,364,000 after acquiring an additional 4,937 shares during the period. Golden State Equity Partners increased its stake in shares of Southwest Airlines by 18.0% during the 1st quarter. Golden State Equity Partners now owns 9,491 shares of the airline's stock worth $319,000 after purchasing an additional 1,448 shares during the last quarter. Golden State Wealth Management LLC raised its holdings in shares of Southwest Airlines by 195.1% in the 1st quarter. Golden State Wealth Management LLC now owns 5,634 shares of the airline's stock valued at $189,000 after purchasing an additional 3,725 shares during the period. Finally, Hedges Asset Management LLC lifted its stake in Southwest Airlines by 4.4% in the 1st quarter. Hedges Asset Management LLC now owns 142,700 shares of the airline's stock valued at $4,792,000 after purchasing an additional 6,000 shares during the last quarter. Institutional investors and hedge funds own 80.82% of the company's stock.

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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