Southwest Airlines’ (LUV) Underperform Rating Reaffirmed at Bank of America

Bank of America reissued their underperform rating on shares of Southwest Airlines (NYSE:LUV) in a research report released on Friday morning, Marketbeat reports. They currently have a $31.00 target price on the airline’s stock, down from their prior target price of $33.00.

Several other brokerages have also recently issued reports on LUV. JPMorgan Chase & Co. boosted their price objective on Southwest Airlines from $20.00 to $26.00 and gave the company a “neutral” rating in a report on Friday, October 25th. Jefferies Financial Group upgraded Southwest Airlines from an “underperform” rating to a “hold” rating and upped their price objective for the stock from $24.00 to $32.00 in a research report on Wednesday, October 9th. TD Cowen raised their price objective on shares of Southwest Airlines from $25.00 to $28.00 and gave the stock a “hold” rating in a research note on Friday, December 6th. Sanford C. Bernstein boosted their target price on shares of Southwest Airlines from $30.00 to $33.00 and gave the company a “market perform” rating in a research note on Wednesday, December 11th. Finally, The Goldman Sachs Group restated a “sell” rating and set a $28.00 price target on shares of Southwest Airlines in a research report on Friday, November 15th. Six analysts have rated the stock with a sell rating, ten have assigned a hold rating and three have issued a buy rating to the company’s stock. Based on data from MarketBeat, the company currently has a consensus rating of “Hold” and a consensus price target of $32.31.

Southwest Airlines Stock Performance

Southwest Airlines stock opened at $32.19 on Friday. The business’s 50-day simple moving average is $33.01 and its two-hundred day simple moving average is $30.10. The company has a current ratio of 0.88, a quick ratio of 0.83 and a debt-to-equity ratio of 0.49. Southwest Airlines has a fifty-two week low of $23.58 and a fifty-two week high of $36.12.

Southwest Airlines (NYSE:LUV) last issued its quarterly earnings results on Thursday, October 24th. The airline reported $0.15 earnings per share for the quarter, topping the consensus estimate of $0.05 by $0.10. The company had revenue of $6.87 billion for the quarter, compared to the consensus estimate of $6.77 billion. Southwest Airlines had a negative net margin of 0.06% and a positive return on equity of 4.56%. Southwest Airlines’s quarterly revenue was up 5.3% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.38 EPS. As a group, sell-side analysts forecast that Southwest Airlines will post 0.81 EPS for the current year.

Southwest Airlines Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Thursday, January 16th. Shareholders of record on Thursday, December 26th were issued a $0.18 dividend. The ex-dividend date of this dividend was Thursday, December 26th. This represents a $0.72 dividend on an annualized basis and a yield of 2.24%. Southwest Airlines’s payout ratio is currently -1,028.57%.

Insider Transactions at Southwest Airlines

In other news, insider Linda B. Rutherford sold 3,849 shares of the business’s stock in a transaction that occurred on Friday, December 6th. The stock was sold at an average price of $34.40, for a total transaction of $132,405.60. Following the transaction, the insider now directly owns 89,376 shares in the company, valued at $3,074,534.40. The trade was a 4.13 % decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, major shareholder Elliott Investment Management sold 1,203,920 shares of Southwest Airlines stock in a transaction that occurred on Monday, October 28th. The stock was sold at an average price of $29.83, for a total value of $35,912,933.60. Following the transaction, the insider now owns 59,912,580 shares in the company, valued at approximately $1,787,192,261.40. The trade was a 1.97 % decrease in their position. The disclosure for this sale can be found here. Insiders own 0.33% of the company’s stock.

Institutional Investors Weigh In On Southwest Airlines

A number of hedge funds have recently modified their holdings of LUV. Franklin Resources Inc. boosted its holdings in Southwest Airlines by 46.2% in the 3rd quarter. Franklin Resources Inc. now owns 30,082,719 shares of the airline’s stock valued at $932,894,000 after purchasing an additional 9,504,201 shares during the last quarter. Dimensional Fund Advisors LP grew its position in Southwest Airlines by 21.6% in the second quarter. Dimensional Fund Advisors LP now owns 5,828,166 shares of the airline’s stock worth $166,742,000 after acquiring an additional 1,034,496 shares during the period. Jacobs Levy Equity Management Inc. increased its stake in Southwest Airlines by 608.5% during the third quarter. Jacobs Levy Equity Management Inc. now owns 3,623,333 shares of the airline’s stock worth $107,359,000 after acquiring an additional 3,111,946 shares during the last quarter. Charles Schwab Investment Management Inc. raised its position in Southwest Airlines by 1.4% in the third quarter. Charles Schwab Investment Management Inc. now owns 3,377,660 shares of the airline’s stock valued at $100,080,000 after purchasing an additional 46,110 shares during the period. Finally, Mizuho Securities USA LLC lifted its stake in shares of Southwest Airlines by 6,414.5% in the 3rd quarter. Mizuho Securities USA LLC now owns 3,006,000 shares of the airline’s stock valued at $89,068,000 after purchasing an additional 2,959,857 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.