Southwest Airlines (NYSE:LUV) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued to investors on Monday.
According to Zacks, “Fuel costs have been on a downward trend lately. In fact, oil prices registered their steepest monthly drop, in a decade, in November. This bodes well for airline stocks including Southwest. Taking advantage of the low oil price scenario, Southwest trimmed its forecast for the fourth quarter of 2018. Detailed results will be out on Jan 24. Moreover, the carrier's efforts to reward shareholders are impressive. Furthermore, efforts to modernize its fleet are praiseworthy. However, capacity-related woes also do not bode well for Southwest. In fact, load factor has declined for eight consecutive months due to capacity overexpansion. Fourth-quarter capacity is likely to expand between 6% and 6.5%. Shares of the company have lost nearly 9% in the past six months.”
LUV has been the subject of a number of other reports. Goldman Sachs Group assumed coverage on Southwest Airlines in a report on Monday, November 12th. They issued a “neutral” rating and a $61.00 price target for the company. Imperial Capital cut their price target on Southwest Airlines from $66.00 to $56.00 and set an “in-line” rating for the company in a report on Friday, October 26th. Wolfe Research raised Southwest Airlines from a “market perform” rating to an “outperform” rating in a report on Friday, December 7th. ValuEngine raised Southwest Airlines from a “hold” rating to a “buy” rating in a report on Monday, September 17th. Finally, Morgan Stanley cut their price target on Southwest Airlines from $68.00 to $64.00 and set an “overweight” rating for the company in a report on Wednesday, November 14th. One analyst has rated the stock with a sell rating, eight have given a hold rating and thirteen have issued a buy rating to the company’s stock. The stock has an average rating of “Buy” and a consensus target price of $61.56.
LUV stock traded up $0.45 during midday trading on Monday, hitting $48.97. 97,656 shares of the stock were exchanged, compared to its average volume of 4,421,837. The stock has a market cap of $27.60 billion, a PE ratio of 13.99, a P/E/G ratio of 0.92 and a beta of 1.31. Southwest Airlines has a fifty-two week low of $44.28 and a fifty-two week high of $66.52. The company has a debt-to-equity ratio of 0.47, a quick ratio of 0.65 and a current ratio of 0.71.
Southwest Airlines (NYSE:LUV) last released its quarterly earnings results on Thursday, October 25th. The airline reported $1.08 earnings per share for the quarter, topping the Zacks’ consensus estimate of $1.06 by $0.02. Southwest Airlines had a return on equity of 22.27% and a net margin of 17.18%. The company had revenue of $5.58 billion during the quarter, compared to analysts’ expectations of $5.56 billion. During the same period in the previous year, the firm posted $0.88 earnings per share. As a group, equities research analysts predict that Southwest Airlines will post 4.13 earnings per share for the current year.
In other Southwest Airlines news, Director John T. Montford sold 980 shares of the business’s stock in a transaction dated Wednesday, December 12th. The stock was sold at an average price of $51.27, for a total transaction of $50,244.60. Following the completion of the sale, the director now owns 20,983 shares of the company’s stock, valued at $1,075,798.41. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director John T. Montford sold 956 shares of the business’s stock in a transaction dated Monday, November 19th. The shares were sold at an average price of $52.35, for a total value of $50,046.60. The disclosure for this sale can be found here. Corporate insiders own 0.23% of the company’s stock.
Hedge funds have recently bought and sold shares of the business. State of Alaska Department of Revenue boosted its position in shares of Southwest Airlines by 1.0% in the fourth quarter. State of Alaska Department of Revenue now owns 85,983 shares of the airline’s stock worth $3,994,000 after buying an additional 864 shares during the period. Moody National Bank Trust Division lifted its stake in shares of Southwest Airlines by 4.1% in the fourth quarter. Moody National Bank Trust Division now owns 8,331 shares of the airline’s stock worth $387,000 after acquiring an additional 331 shares in the last quarter. Norman Fields Gottscho Capital Management LLC lifted its stake in shares of Southwest Airlines by 33.1% in the fourth quarter. Norman Fields Gottscho Capital Management LLC now owns 60,155 shares of the airline’s stock worth $2,796,000 after acquiring an additional 14,975 shares in the last quarter. Fulton Bank N.A. lifted its stake in shares of Southwest Airlines by 0.8% in the fourth quarter. Fulton Bank N.A. now owns 29,372 shares of the airline’s stock worth $1,366,000 after acquiring an additional 237 shares in the last quarter. Finally, Cornerstone Advisors Inc. lifted its stake in shares of Southwest Airlines by 6.8% in the third quarter. Cornerstone Advisors Inc. now owns 4,572 shares of the airline’s stock worth $286,000 after acquiring an additional 292 shares in the last quarter. 79.43% of the stock is owned by hedge funds and other institutional investors.
About Southwest Airlines
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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