Southwest Airlines (LUV) Rating Lowered to Hold at Zacks Investment Research

Southwest Airlines (NYSE:LUV) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued to clients and investors on Thursday.

According to Zacks, “Shares of Southwest Airlines have gained more than 8% over the last three months, outperforming its industry. The improved third quarter 2018 unit revenue view, unveiled by the company in September, on the back of solid demand for air travel , contributed to the uptick. Southwest Airlines expects passenger revenues to be strong in the third quarter owing to impressive bookings and close-in yield trends. Detailed results should be out on Oct 25. Also, the company's efforts to reward shareholders are commendable. We are impressed with Southwest Airlines’ initiatives to expand its operations and modernize its fleet as well. Moreover, the new tax law, which reduces corporate tax rate significantly, is a huge positive for the company. High fuel costs are, however, concerning as they are limiting bottom-line growth. This is expected to continue in the third quarter as well. Labor costs too are expected to limit bottom-line growth.”

Several other research firms have also recently weighed in on LUV. ValuEngine upgraded shares of Southwest Airlines from a “hold” rating to a “buy” rating in a research report on Monday, September 17th. Macquarie upgraded shares of Southwest Airlines to an “outperform” rating in a research report on Tuesday, September 18th. Imperial Capital restated an “outperform” rating and set a $66.00 price objective (up previously from $60.00) on shares of Southwest Airlines in a research report on Thursday, September 27th. Buckingham Research raised their price objective on shares of Southwest Airlines from $69.00 to $73.00 and gave the company a “buy” rating in a research report on Friday, September 7th. Finally, Argus upgraded shares of Southwest Airlines from a “hold” rating to a “buy” rating and set a $73.00 price objective on the stock in a research report on Friday, September 7th. Five equities research analysts have rated the stock with a hold rating and fifteen have assigned a buy rating to the stock. The stock presently has a consensus rating of “Buy” and an average price target of $69.30.

Southwest Airlines stock opened at $57.38 on Thursday. The company has a debt-to-equity ratio of 0.48, a quick ratio of 0.64 and a current ratio of 0.70. The firm has a market cap of $35.79 billion, a PE ratio of 16.39, a P/E/G ratio of 1.24 and a beta of 1.06. Southwest Airlines has a fifty-two week low of $49.93 and a fifty-two week high of $66.99.

Southwest Airlines (NYSE:LUV) last posted its quarterly earnings data on Thursday, July 26th. The airline reported $1.26 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $1.23 by $0.03. The firm had revenue of $5.74 billion for the quarter, compared to analysts’ expectations of $5.75 billion. Southwest Airlines had a net margin of 16.90% and a return on equity of 22.16%. The business’s quarterly revenue was up .2% on a year-over-year basis. During the same quarter last year, the company posted $1.24 EPS. As a group, equities analysts forecast that Southwest Airlines will post 4.2 earnings per share for the current year.

In other Southwest Airlines news, Director John T. Montford sold 430 shares of the firm’s stock in a transaction on Tuesday, August 7th. The shares were sold at an average price of $58.27, for a total value of $25,056.10. Following the sale, the director now owns 23,853 shares of the company’s stock, valued at approximately $1,389,914.31. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, EVP Andrew M. Watterson sold 6,130 shares of the firm’s stock in a transaction on Friday, August 17th. The stock was sold at an average price of $59.28, for a total transaction of $363,386.40. Following the completion of the sale, the executive vice president now directly owns 16,597 shares in the company, valued at approximately $983,870.16. The disclosure for this sale can be found here. In the last quarter, insiders sold 11,470 shares of company stock worth $674,941. 0.23% of the stock is owned by corporate insiders.

A number of institutional investors have recently made changes to their positions in the business. Chessman Wealth Strategies RIA bought a new stake in Southwest Airlines in the 3rd quarter worth $172,000. Laurel Grove Capital LLC grew its holdings in Southwest Airlines by 101.1% in the 3rd quarter. Laurel Grove Capital LLC now owns 26,550 shares of the airline’s stock worth $1,658,000 after acquiring an additional 13,350 shares during the last quarter. Amarillo National Bank grew its holdings in Southwest Airlines by 30.5% in the 3rd quarter. Amarillo National Bank now owns 19,983 shares of the airline’s stock worth $1,248,000 after acquiring an additional 4,669 shares during the last quarter. Northwest Wealth Management LLC grew its holdings in Southwest Airlines by 357.1% in the 3rd quarter. Northwest Wealth Management LLC now owns 1,920 shares of the airline’s stock worth $120,000 after acquiring an additional 1,500 shares during the last quarter. Finally, Gofen & Glossberg LLC IL grew its holdings in Southwest Airlines by 53.1% in the 3rd quarter. Gofen & Glossberg LLC IL now owns 10,548 shares of the airline’s stock worth $659,000 after acquiring an additional 3,658 shares during the last quarter. 77.99% of the stock is currently owned by institutional investors and hedge funds.

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, 2017, the company operated a total of 706 Boeing 737 aircraft; and served 100 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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