Southwest Airlines (NYSE:LUV) Price Target Lowered to $34.00 at Evercore ISI

Key Points

• Evercore ISI has decreased its price target for Southwest Airlines from $40.00 to $34.00, maintaining an "in-line" rating.
• Southwest Airlines' stock is currently priced at $32.84, reflecting a 1.3% decline, with a potential upside of 3.52% from the new price target.
• The airline's latest earnings report showed an EPS of $0.43, missing the consensus estimate of $0.51, with revenue down 2.1% year-over-year.
• Southwest Airlines has initiated a stock buyback plan authorizing the repurchase of up to $2.00 billion in shares, signaling confidence in the stock's value.

Southwest Airlines (NYSE:LUV - Get Free Report) had its target price decreased by investment analysts at Evercore ISI from $40.00 to $34.00 in a research note issued to investors on Friday,Benzinga reports. The brokerage currently has an "in-line" rating on the airline's stock. Evercore ISI's target price would suggest a potential upside of 7.34% from the stock's current price.

A number of other brokerages have also recently weighed in on LUV. Citigroup cut their price objective on shares of Southwest Airlines from $30.00 to $23.00 and set a "sell" rating on the stock in a research note on Monday, April 14th. Deutsche Bank Aktiengesellschaft raised Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 price target for the company in a research note on Thursday, May 29th. Raymond James Financial restated an "outperform" rating and issued a $40.00 price objective (down previously from $42.00) on shares of Southwest Airlines in a report on Tuesday, April 29th. 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. Finally, UBS Group raised their price objective 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. Seven research analysts have rated the stock with a sell rating, nine have assigned a hold rating and four have issued a buy rating to the company. According to MarketBeat, the stock has an average rating of "Hold" and a consensus target price of $32.75.

Southwest Airlines Stock Performance

Shares of LUV traded down $0.85 during midday trading on Friday, hitting $31.68. 5,072,663 shares of the stock traded hands, compared to its average volume of 12,038,423. The firm has a market capitalization of $18.05 billion, a PE ratio of 48.08, a price-to-earnings-growth ratio of 5.12 and a beta of 1.21. The business's 50 day moving average price is $33.52 and its two-hundred day moving average price is $31.32. Southwest Airlines has a 1-year low of $23.58 and a 1-year high of $37.96. The company has a debt-to-equity ratio of 0.51, a quick ratio of 0.49 and a current ratio of 0.56.

Southwest Airlines (NYSE:LUV - Get Free Report) last announced 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). The firm 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%. Southwest Airlines's revenue for the quarter was down 2.1% compared to the same quarter last year. During the same quarter in the previous year, the business posted $0.58 EPS. Equities research analysts predict that Southwest Airlines will post 1.55 EPS for the current fiscal year.

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

Insider Activity

In related news, Director Gregg A. Saretsky acquired 3,670 shares of the stock in a transaction that occurred on Wednesday, April 30th. The shares were purchased at an average cost of $27.29 per share, with a total value of $100,154.30. Following the completion of the transaction, the director owned 14,881 shares of the company's stock, valued at approximately $406,102.49. This trade represents a 32.74% increase in their position. The purchase was disclosed in a filing with the SEC, which can be accessed through this link. 0.79% of the stock is owned by company insiders.

Institutional Investors Weigh In On Southwest Airlines

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. GAMMA Investing LLC increased its stake in shares of Southwest Airlines by 3,538.6% in the first quarter. GAMMA Investing LLC now owns 326,129 shares of the airline's stock worth $10,951,000 after acquiring an additional 317,166 shares during the last quarter. Mirae Asset Global Investments Co. Ltd. grew its stake in Southwest Airlines by 10.4% in the first quarter. Mirae Asset Global Investments Co. Ltd. now owns 63,625 shares of the airline's stock valued at $2,137,000 after purchasing an additional 5,981 shares in the last quarter. Exchange Traded Concepts LLC increased its position in Southwest Airlines by 7.0% in the 1st quarter. Exchange Traded Concepts LLC now owns 11,625 shares of the airline's stock worth $390,000 after purchasing an additional 759 shares during the last quarter. Tidal Investments LLC raised its stake in shares of Southwest Airlines by 25.1% during the 4th quarter. Tidal Investments LLC now owns 55,691 shares of the airline's stock worth $1,872,000 after purchasing an additional 11,173 shares in the last quarter. Finally, State of Alaska Department of Revenue lifted its holdings in shares of Southwest Airlines by 1.5% during the 1st quarter. State of Alaska Department of Revenue now owns 69,413 shares of the airline's stock valued at $2,330,000 after buying an additional 1,035 shares during the last quarter. Hedge funds and other institutional investors own 80.82% of the company's stock.

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.