Southwest Airlines (NYSE:LUV) Stock Price Expected to Rise, JPMorgan Chase & Co. Analyst Says

Key Points

• JPMorgan Chase & Co. raised the price target for Southwest Airlines' stock from $28.00 to $35.00, indicating a potential upside of 10.10% from the current price.
• Southwest Airlines reported quarterly earnings of $0.43 per share, missing analyst expectations of $0.51, with a revenue decline of 2.1% year-over-year.
• The airline has authorized a $2.00 billion share buyback program, indicating confidence from the leadership in the stock's undervaluation.

Southwest Airlines (NYSE:LUV - Get Free Report) had its price objective hoisted by stock analysts at JPMorgan Chase & Co. from $28.00 to $35.00 in a research note issued on Friday,Benzinga reports. The brokerage presently has an "overweight" rating on the airline's stock. JPMorgan Chase & Co.'s target price indicates a potential upside of 10.10% from the company's current price.

A number of other research firms also recently commented on LUV. Barclays increased their price objective on shares of Southwest Airlines from $26.00 to $34.00 and gave the company an "equal weight" rating in a research note on Thursday, July 10th. Deutsche Bank Aktiengesellschaft upgraded shares of Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 price objective on the stock in a research note on Thursday, May 29th. UBS Group increased their price objective on shares of Southwest Airlines from $27.00 to $34.00 and gave the company a "neutral" rating in a research note on Monday, July 7th. Jefferies Financial Group upgraded shares of Southwest Airlines from an "underperform" rating to a "hold" rating and increased their price objective for the company from $24.00 to $33.00 in a research note on Tuesday, May 27th. Finally, Hsbc Global Res upgraded shares of Southwest Airlines to a "moderate sell" rating in a research report on Thursday, July 24th. Five investment analysts have rated the stock with a Buy rating, nine have given a Hold rating and five have issued a Sell rating to the company. According to MarketBeat, the company has a consensus rating of "Hold" and an average price target of $33.38.

Southwest Airlines Price Performance

LUV opened at $31.79 on Friday. The company has a fifty day simple moving average of $32.79 and a 200 day simple moving average of $31.34. The firm has a market cap of $16.70 billion, a price-to-earnings ratio of 48.17, a PEG ratio of 0.81 and a beta of 1.19. 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.

Southwest Airlines (NYSE:LUV - Get Free Report) last posted its quarterly earnings data on Wednesday, July 23rd. The airline reported $0.43 EPS 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 company had revenue of $7.24 billion for the quarter, compared to the consensus estimate of $7.30 billion. During the same quarter last year, the company earned $0.58 earnings per share. The company's revenue was down 2.1% compared to the same quarter last year. Equities research analysts expect that Southwest Airlines will post 1.55 EPS for the current fiscal year.

Southwest Airlines announced that its board has authorized a share buyback program on Wednesday, July 23rd that permits the company to repurchase $2.00 billion in outstanding shares. This repurchase authorization permits the airline to buy up to 9.4% of its shares through open market purchases. Shares repurchase programs are generally an indication that the company's leadership believes its shares are undervalued.

Insider Activity

In related news, Director Sarah Feinberg bought 1,500 shares of the stock in a transaction on Tuesday, August 5th. The shares were purchased at an average price of $30.01 per share, with a total value of $45,015.00. Following the purchase, the director 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 purchase was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director Gregg A. Saretsky bought 3,345 shares of the stock in a transaction on Wednesday, August 6th. The shares were bought at an average cost of $30.03 per share, for a total transaction of $100,450.35. Following the purchase, the director owned 23,644 shares in the company, valued at $710,029.32. This trade represents a 16.48% increase in their position. The disclosure for this purchase can be found here. 0.79% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Southwest Airlines

Large investors have recently bought and sold shares of the stock. Elevation Point Wealth Partners LLC acquired a new position in Southwest Airlines during the 2nd quarter valued at about $25,000. Caitong International Asset Management Co. Ltd acquired a new position in Southwest Airlines during the 2nd quarter valued at about $31,000. Pandora Wealth Inc. acquired a new position in Southwest Airlines during the 1st quarter valued at about $34,000. Hantz Financial Services Inc. increased its stake in Southwest Airlines by 81.4% during the 2nd quarter. Hantz Financial Services Inc. now owns 1,056 shares of the airline's stock valued at $34,000 after buying an additional 474 shares during the period. Finally, Cheviot Value Management LLC acquired a new position in shares of Southwest Airlines in the 1st quarter worth approximately $42,000. 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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