10 Oversold Stocks That Are Ready For a Comeback - 2 of 10

#2 - Southwest Airlines (NYSE:LUV)

Southwest Airlines (LUV)  RSI Score = 31.56

Speaking of airline stocks, there are none of them that are a screaming buy at this time. But it appears that Southwest Airlines (NYSE:LUV) has been singled out. LUV stock has an RSI score of just over 30 which is putting it right about in oversold territory.  Part of the reason for investor pessimism is that Warren Buffett’s hedge fund, Berkshire Hathaway (NYSE:BRK/A) (NYSE:BRK/B), sold their entire stake in Southwest and other airlines.

According to Buffett, airlines are facing a different world and stated that Berkshire was in a worse position after having taken on airline stocks four years ago. Predictably, Southwest’s CEO Gary Kelly disagrees. Kelly did not disagree with Buffett’s assessment of the near-term outlook for all airlines. However, he has a more optimistic long-term outlook.

In making his case, Kelly cites the fact that Southwest is better positioned to capture the customer who is price sensitive. The airline is known for its low-cost flights so it shouldn’t have to drastically discount its airfare in trying to capture customers. 

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. Read More 

Current Price

$29.06

Consensus Rating

Hold

Ratings Breakdown

5 Buy Ratings, 9 Hold Ratings, 3 Sell Ratings.

Consensus Price Target

$31.82 (9.5% Upside)