Southwest Airlines Co. (NYSE:LUV) Given Consensus Recommendation of "Hold" by Analysts

Key Points

• Southwest Airlines has received a consensus recommendation of “Hold” from analysts, with four analysts rating the stock as a sell, nine as hold, and five as buy.
• The airline's quarterly earnings report showed $0.43 earnings per share, missing analysts' expectations by $0.08, and revenue fell 2.1% compared to the previous year.
• Southwest Airlines has initiated a share buyback program authorizing the purchase of up to $2.00 billion in shares, reflecting the board's belief that the stock is undervalued.

Southwest Airlines Co. (NYSE:LUV - Get Free Report) has been given an average rating of "Hold" by the eighteen brokerages that are currently covering the company, Marketbeat.com reports. Four equities research analysts have rated the stock with a sell recommendation, nine have assigned a hold recommendation and five have given a buy recommendation to the company. The average 1-year price objective among analysts that have issued a report on the stock in the last year is $33.3125.

LUV has been the subject of several analyst reports. Jefferies Financial Group boosted their target price on Southwest Airlines from $30.00 to $31.00 and gave the stock a "hold" rating in a research note on Wednesday. Hsbc Global Res raised Southwest Airlines to a "moderate sell" rating in a research note on Thursday, July 24th. Wall Street Zen cut Southwest Airlines from a "hold" rating to a "sell" rating in a research note on Saturday, July 26th. JPMorgan Chase & Co. boosted their target price on Southwest Airlines from $28.00 to $35.00 and gave the stock an "overweight" rating in a research note on Friday, September 12th. Finally, Barclays boosted their target price on Southwest Airlines from $26.00 to $34.00 and gave the stock an "equal weight" rating in a research note on Thursday, July 10th.

Insider Transactions at Southwest Airlines

In other Southwest Airlines news, Director Sarah Feinberg purchased 1,500 shares of the firm's stock in a transaction on Tuesday, August 5th. The stock was bought at an average cost of $30.01 per share, with a total value of $45,015.00. Following the acquisition, the director directly owned 14,229 shares of the company's stock, valued at approximately $427,012.29. This represents a 11.78% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, Director Gregg A. Saretsky purchased 3,345 shares of the firm's stock in a transaction on Wednesday, August 6th. The shares were acquired at an average cost of $30.03 per share, with a total value of $100,450.35. Following the completion of the acquisition, the director directly owned 23,644 shares in the company, valued at $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. 0.79% of the stock is owned by insiders.

Institutional Trading of Southwest Airlines

Several institutional investors and hedge funds have recently made changes to their positions in the company. Ameriflex Group Inc. lifted its holdings in shares of Southwest Airlines by 7.1% in the 2nd quarter. Ameriflex Group Inc. now owns 4,690 shares of the airline's stock valued at $148,000 after purchasing an additional 310 shares during the last quarter. Benjamin Edwards Inc. lifted its holdings in shares of Southwest Airlines by 1.4% in the 2nd quarter. Benjamin Edwards Inc. now owns 24,857 shares of the airline's stock valued at $806,000 after purchasing an additional 333 shares during the last quarter. Copperwynd Financial LLC lifted its holdings in shares of Southwest Airlines by 2.1% in the 1st quarter. Copperwynd Financial LLC now owns 16,301 shares of the airline's stock valued at $547,000 after purchasing an additional 337 shares during the last quarter. GAMMA Investing LLC lifted its holdings in shares of Southwest Airlines by 2.4% in the 3rd quarter. GAMMA Investing LLC now owns 14,285 shares of the airline's stock valued at $456,000 after purchasing an additional 341 shares during the last quarter. Finally, PNC Financial Services Group Inc. lifted its holdings in shares of Southwest Airlines by 0.5% in the 1st quarter. PNC Financial Services Group Inc. now owns 76,719 shares of the airline's stock valued at $2,576,000 after purchasing an additional 345 shares during the last quarter. 80.82% of the stock is owned by hedge funds and other institutional investors.

Southwest Airlines Trading Up 0.2%

Shares of NYSE LUV opened at $32.33 on Friday. Southwest Airlines has a twelve month low of $23.82 and a twelve month 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 stock has a fifty day simple moving average of $31.66 and a 200-day simple moving average of $31.54. The stock has a market capitalization of $16.98 billion, a PE ratio of 48.99, a PEG ratio of 0.85 and a beta of 1.21.

Southwest Airlines (NYSE:LUV - Get Free Report) last issued its quarterly earnings data on Wednesday, July 23rd. The airline reported $0.43 earnings per share for the quarter, missing analysts' consensus estimates 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 period in the previous year, the firm posted $0.58 earnings per share. The company's quarterly revenue was down 2.1% compared to the same quarter last year. On average, equities analysts forecast that Southwest Airlines will post 1.55 earnings per share for the current year.

Southwest Airlines Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Wednesday, September 24th. Shareholders of record on Wednesday, September 3rd were issued a dividend of $0.18 per share. This represents a $0.72 dividend on an annualized basis and a yield of 2.2%. The ex-dividend date of this dividend was Wednesday, September 3rd. Southwest Airlines's payout ratio is 109.09%.

Southwest Airlines announced that its Board of Directors has initiated a share buyback program on Wednesday, July 23rd that allows the company to buyback $2.00 billion in shares. This buyback authorization allows the airline to purchase up to 9.4% of its shares through open market purchases. Shares buyback programs are often a sign that the company's board of directors believes its shares are 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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