Southwest Airlines (NYSE:LUV) Receives “Underperform” Rating from Bank of America

Bank of America reiterated their underperform rating on shares of Southwest Airlines (NYSE:LUV) in a report published 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 research firms have also recently commented on LUV. Citigroup reissued a “sell” rating and set a $29.50 price target (down from $31.50) on shares of Southwest Airlines in a research note on Thursday. The Goldman Sachs Group reissued a “sell” rating and issued a $28.00 target price on shares of Southwest Airlines in a research note on Friday, November 15th. Sanford C. Bernstein upped their price target on Southwest Airlines from $30.00 to $33.00 and gave the company a “market perform” rating in a research note on Wednesday, December 11th. BNP Paribas upgraded Southwest Airlines to a “strong sell” rating in a research report on Thursday, September 19th. Finally, UBS Group upped their target price on shares of Southwest Airlines from $27.00 to $29.00 and gave the company a “sell” rating in a research report on Tuesday, January 7th. Six equities research analysts have rated the stock with a sell rating, ten have given a hold rating and three have issued a buy rating to the company. Based on data from MarketBeat, Southwest Airlines currently has a consensus rating of “Hold” and a consensus price target of $32.31.

Southwest Airlines Stock Performance

NYSE:LUV opened at $32.19 on Friday. The stock has a market capitalization of $19.31 billion, a P/E ratio of -459.90, a price-to-earnings-growth ratio of 3.27 and a beta of 1.14. 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 1 year low of $23.58 and a 1 year high of $36.12. The firm has a 50 day moving average of $33.02 and a 200-day moving average of $30.14.

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

Southwest Airlines Announces Dividend

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

Insider Activity at Southwest Airlines

In related news, insider Linda B. Rutherford sold 3,849 shares of the stock in a transaction on Friday, December 6th. The shares were 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 of the company’s stock, valued at $3,074,534.40. This represents a 4.13 % decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, major shareholder Elliott Investment Management sold 1,203,920 shares of the stock in a transaction dated Monday, October 28th. The stock was sold at an average price of $29.83, for a total transaction of $35,912,933.60. Following the transaction, the insider now directly owns 59,912,580 shares in the company, valued at $1,787,192,261.40. This trade represents a 1.97 % decrease in their position. The disclosure for this sale can be found here. 0.33% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of LUV. Hedges Asset Management LLC boosted its position in Southwest Airlines by 2.5% in the fourth quarter. Hedges Asset Management LLC now owns 136,700 shares of the airline’s stock worth $4,596,000 after purchasing an additional 3,300 shares during the last quarter. Avior Wealth Management LLC boosted its holdings in shares of Southwest Airlines by 3.8% in the 4th quarter. Avior Wealth Management LLC now owns 10,116 shares of the airline’s stock worth $340,000 after buying an additional 369 shares during the last quarter. Raleigh Capital Management Inc. grew its position in Southwest Airlines by 186.7% during the fourth quarter. Raleigh Capital Management Inc. now owns 883 shares of the airline’s stock valued at $30,000 after buying an additional 575 shares during the period. Janney Montgomery Scott LLC increased its holdings in Southwest Airlines by 10.0% during the fourth quarter. Janney Montgomery Scott LLC now owns 10,551 shares of the airline’s stock worth $355,000 after buying an additional 962 shares during the last quarter. Finally, MBM Wealth Consultants LLC raised its position in Southwest Airlines by 11.4% in the fourth quarter. MBM Wealth Consultants LLC now owns 16,352 shares of the airline’s stock worth $546,000 after acquiring an additional 1,676 shares during the period. Hedge funds and other institutional investors own 80.82% of the company’s stock.

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.