Southwest Airlines Co. (NYSE:LUV) Receives $33.06 Consensus PT from Brokerages

Key Points

• Analysts have given Southwest Airlines Co. a consensus rating of "Reduce", with 6 sell ratings, 9 hold ratings, and 4 buy ratings, while the average 1-year price target is $33.06.
• Southwest Airlines reported $0.43 earnings per share, missing the consensus estimate of $0.51, with revenue of $7.24 billion, down 2.1% year-over-year.
• The company has authorized a $2 billion share repurchase program, suggesting management believes the stock is undervalued.

Shares of Southwest Airlines Co. (NYSE:LUV - Get Free Report) have received a consensus recommendation of "Reduce" from the nineteen ratings firms that are presently covering the firm, Marketbeat.com reports. Six equities research analysts have rated the stock with a sell recommendation, nine have given a hold recommendation and four have assigned a buy recommendation to the company. The average 1 year price objective among analysts that have covered the stock in the last year is $33.0625.

A number of analysts have weighed in on the stock. 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. HSBC downgraded Southwest Airlines from a "hold" rating to a "reduce" rating in a report on Thursday, July 24th. Jefferies Financial Group raised Southwest Airlines from an "underperform" rating to a "hold" rating and lifted their target price for the stock from $24.00 to $33.00 in a report on Tuesday, May 27th. UBS Group upped their price target on shares of Southwest Airlines from $27.00 to $34.00 and gave the company a "neutral" rating in a research report on Monday, July 7th. Finally, Hsbc Global Res raised shares of Southwest Airlines to a "moderate sell" rating in a research report on Thursday, July 24th.

Southwest Airlines Price Performance

Shares of LUV stock traded down $0.19 during trading hours on Thursday, reaching $31.32. The company's stock had a trading volume of 2,153,467 shares, compared to its average volume of 11,782,678. The firm's 50 day simple moving average is $32.93 and its 200-day simple moving average is $31.12. The company has a market capitalization of $16.45 billion, a price-to-earnings ratio of 47.45, a PEG ratio of 0.82 and a beta of 1.26. Southwest Airlines has a fifty-two week low of $23.82 and a fifty-two week high of $37.96. The company has a quick ratio of 0.49, a current ratio of 0.56 and a debt-to-equity ratio of 0.51.

Southwest Airlines (NYSE:LUV - Get Free Report) last issued its earnings results 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). The business had revenue of $7.24 billion during the quarter, compared to analyst estimates of $7.30 billion. Southwest Airlines had a net margin of 1.43% and a return on equity of 6.27%. The company'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 business posted $0.58 EPS. Sell-side analysts forecast that Southwest Airlines will post 1.55 earnings per share for the current year.

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

Southwest Airlines Dividend Announcement

The firm 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 $0.18 dividend. The ex-dividend date of this dividend is Wednesday, September 3rd. This represents a $0.72 annualized dividend and a yield of 2.3%. Southwest Airlines's dividend payout ratio (DPR) is 109.09%.

Insider Buying and Selling at Southwest Airlines

In other news, Director Gregg A. Saretsky purchased 3,345 shares of the business's stock in a transaction on Wednesday, August 6th. The stock was purchased at an average cost of $30.03 per share, with a total value of $100,450.35. Following the acquisition, the director directly owned 23,644 shares in the company, valued at approximately $710,029.32. This trade represents a 16.48% increase in their ownership of the stock. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available through 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 purchased at an average cost of $30.01 per share, with a total value of $45,015.00. Following the completion of the acquisition, the director owned 14,229 shares in the company, valued at approximately $427,012.29. This trade 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 owned by company insiders.

Institutional Trading of Southwest Airlines

Several institutional investors and hedge funds have recently made changes to their positions in the stock. Primecap Management Co. CA raised its position in shares of Southwest Airlines by 1.6% during the 1st quarter. Primecap Management Co. CA now owns 49,688,308 shares of the airline's stock valued at $1,668,533,000 after buying an additional 788,255 shares in the last quarter. Artisan Partners Limited Partnership raised its position in Southwest Airlines by 0.9% in the 2nd quarter. Artisan Partners Limited Partnership now owns 10,763,935 shares of the airline's stock worth $349,182,000 after purchasing an additional 98,290 shares during the period. Arrowstreet Capital Limited Partnership raised its position in Southwest Airlines by 2,403.8% in the 2nd quarter. Arrowstreet Capital Limited Partnership now owns 10,120,368 shares of the airline's stock worth $328,305,000 after purchasing an additional 9,716,160 shares during the period. Dimensional Fund Advisors LP raised its position in Southwest Airlines by 6.5% in the 4th quarter. Dimensional Fund Advisors LP now owns 6,111,634 shares of the airline's stock worth $205,476,000 after purchasing an additional 372,313 shares during the period. Finally, Jacobs Levy Equity Management Inc. raised its position in Southwest Airlines by 66.0% in the 4th quarter. Jacobs Levy Equity Management Inc. now owns 6,014,828 shares of the airline's stock worth $202,219,000 after purchasing an additional 2,391,495 shares during the period. Hedge funds and other institutional investors 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.