Southwest Airlines (NYSE:LUV) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued to clients and investors on Thursday, Zacks.com reports.
According to Zacks, “Shares of Southwest Airlines have shed more than 9% of their value in the past three months due to headwinds like delayed launch of the Hawaii service, grounding of Boeing 737 MAX jets and the 35-day partial government shutdown. Southwest Airlines, which has 34 Boeing 737 MAX jets in its fleet, extended the grounding period of such jets from May end, announced previously, through Aug 5. Flight cancellations due to the grounding are not only increasing passengers' harassments but also pushing up costs. The carrier expects second-quarter non-fuel unit costs to increase in the 10.5-12.5% range year over year. The projection compares unfavorably to the 7.4% increase registered in the first quarter. Woes related to capacity overexpansion are also hurting Southwest Airlines. However, we are pleased with the company's efforts to reward its shareholders. The carrier's employee-friendly approach is encouraging as well.”
A number of other research analysts have also recently issued reports on the company. Argus reiterated a “buy” rating on shares of Southwest Airlines in a research report on Wednesday, May 1st. Barclays decreased their target price on Southwest Airlines from $65.00 to $60.00 and set an “equal weight” rating on the stock in a research report on Friday, April 26th. Imperial Capital reiterated an “in-line” rating and issued a $55.00 target price (up previously from $52.00) on shares of Southwest Airlines in a research report on Friday, April 26th. ValuEngine upgraded Southwest Airlines from a “sell” rating to a “hold” rating in a research report on Tuesday, April 16th. Finally, Raymond James cut Southwest Airlines from an “outperform” rating to a “market perform” rating and set a $53.25 target price on the stock. in a research report on Monday, April 8th. Three investment analysts have rated the stock with a sell rating, eight have given a hold rating and nine have assigned a buy rating to the company. The stock has an average rating of “Hold” and an average target price of $58.64.
NYSE LUV opened at $51.65 on Thursday. Southwest Airlines has a 52-week low of $44.28 and a 52-week high of $64.02. The company has a debt-to-equity ratio of 0.28, a current ratio of 0.63 and a quick ratio of 0.57. The company has a market cap of $27.66 billion, a P/E ratio of 12.18, a price-to-earnings-growth ratio of 1.28 and a beta of 1.49.
Southwest Airlines (NYSE:LUV) last issued its quarterly earnings results on Thursday, April 25th. The airline reported $0.70 earnings per share for the quarter, topping the consensus estimate of $0.61 by $0.09. Southwest Airlines had a net margin of 10.78% and a return on equity of 23.94%. The company had revenue of $5.15 billion during the quarter, compared to analysts’ expectations of $5.14 billion. During the same period last year, the business earned $0.79 EPS. The business’s quarterly revenue was up 4.1% on a year-over-year basis. As a group, sell-side analysts expect that Southwest Airlines will post 4.67 earnings per share for the current year.
Several large investors have recently added to or reduced their stakes in the company. Paragon Capital Management LLC acquired a new position in Southwest Airlines in the first quarter valued at approximately $26,000. Shine Investment Advisory Services Inc. lifted its stake in Southwest Airlines by 208.0% in the first quarter. Shine Investment Advisory Services Inc. now owns 616 shares of the airline’s stock valued at $32,000 after buying an additional 416 shares during the period. Acadian Asset Management LLC acquired a new position in Southwest Airlines in the fourth quarter valued at approximately $33,000. Destination Wealth Management lifted its stake in Southwest Airlines by 107.9% in the first quarter. Destination Wealth Management now owns 634 shares of the airline’s stock valued at $33,000 after buying an additional 329 shares during the period. Finally, Field & Main Bank acquired a new position in Southwest Airlines in the first quarter valued at approximately $35,000. Institutional investors own 81.66% of the company’s stock.
Southwest Airlines Company Profile
Southwest Airlines Co operates a passenger airline that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2018, the company operated a total of 750 Boeing 737 aircraft; and served 99 destinations in 40 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as 10 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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