BidaskClub Downgrades Southwest Airlines Company (LUV) to Hold

BidaskClub lowered shares of Southwest Airlines Company (NYSE:LUV) from a buy rating to a hold rating in a report released on Monday, July 24th.

Several other research firms also recently weighed in on LUV. Wolfe Research downgraded Southwest Airlines from an outperform rating to a market perform rating and set a $63.00 target price for the company. in a research report on Monday, July 10th. They noted that the move was a valuation call. Morgan Stanley reaffirmed an overweight rating and issued a $66.00 target price (up from $65.00) on shares of Southwest Airlines in a research report on Monday, July 10th. Zacks Investment Research raised Southwest Airlines from a hold rating to a buy rating and set a $70.00 target price for the company in a research report on Tuesday, July 4th. Sanford C. Bernstein reaffirmed an outperform rating and issued a $70.00 target price on shares of Southwest Airlines in a research report on Thursday, July 13th. Finally, Bank of America Corporation lifted their target price on Southwest Airlines from $62.00 to $75.00 and gave the company a buy rating in a research report on Friday, June 30th. One research analyst has rated the stock with a sell rating, six have issued a hold rating, eleven have given a buy rating and one has given a strong buy rating to the company. The stock presently has a consensus rating of Buy and an average target price of $65.78.

Shares of Southwest Airlines (NYSE LUV) opened at 54.14 on Monday. The stock has a market capitalization of $32.41 billion, a price-to-earnings ratio of 16.60 and a beta of 1.26. The company has a 50-day moving average of $59.56 and a 200-day moving average of $57.18. Southwest Airlines has a 1-year low of $36.05 and a 1-year high of $64.39.

Southwest Airlines (NYSE:LUV) last issued its quarterly earnings data on Thursday, July 27th. The airline reported $1.24 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.20 by $0.04. The firm had revenue of $5.74 billion during the quarter, compared to the consensus estimate of $5.73 billion. Southwest Airlines had a return on equity of 26.07% and a net margin of 9.63%. The company’s quarterly revenue was up 6.7% on a year-over-year basis. During the same period last year, the company earned $1.19 EPS. On average, equities research analysts expect that Southwest Airlines will post $3.80 EPS for the current fiscal year.

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The firm also recently announced a quarterly dividend, which will be paid on Thursday, September 14th. Investors of record on Thursday, August 24th will be paid a dividend of $0.125 per share. This represents a $0.50 annualized dividend and a yield of 0.92%. The ex-dividend date of this dividend is Tuesday, August 22nd. Southwest Airlines’s payout ratio is 15.34%.

Southwest Airlines announced that its board has authorized a stock repurchase program on Wednesday, May 17th that allows the company to buyback $2.00 billion in shares. This buyback authorization allows the airline to reacquire up to 5.8% of its stock through open market purchases. Stock buyback programs are usually an indication that the company’s leadership believes its shares are undervalued.

In other Southwest Airlines news, EVP Jeff Lamb sold 19,800 shares of Southwest Airlines stock in a transaction that occurred on Thursday, May 25th. The stock was sold at an average price of $61.00, for a total transaction of $1,207,800.00. Following the transaction, the executive vice president now owns 92,468 shares of the company’s stock, valued at $5,640,548. The transaction was disclosed in a filing with the SEC, which is available at this link. Also, CFO Tammy Romo sold 8,322 shares of Southwest Airlines stock in a transaction that occurred on Tuesday, May 23rd. The stock was sold at an average price of $59.15, for a total value of $492,246.30. Following the transaction, the chief financial officer now directly owns 87,387 shares in the company, valued at approximately $5,168,941.05. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 118,740 shares of company stock valued at $6,923,568. 0.21% of the stock is owned by company insiders.

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in LUV. DnB Asset Management AS purchased a new position in Southwest Airlines during the first quarter valued at approximately $697,000. GSA Capital Partners LLP raised its position in Southwest Airlines by 22.3% in the fourth quarter. GSA Capital Partners LLP now owns 7,142 shares of the airline’s stock valued at $356,000 after buying an additional 1,303 shares during the period. Norman Fields Gottscho Capital Management LLC purchased a new position in Southwest Airlines during the first quarter valued at approximately $333,000. MARSHALL WACE ASIA Ltd purchased a new position in Southwest Airlines during the first quarter valued at approximately $22,797,000. Finally, Wealthfront Inc. raised its position in Southwest Airlines by 14.9% in the fourth quarter. Wealthfront Inc. now owns 12,381 shares of the airline’s stock valued at $617,000 after buying an additional 1,610 shares during the period. 80.34% of the stock is currently owned by institutional investors.

About Southwest Airlines

Southwest Airlines Co (Southwest) operates Southwest Airlines, a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Company provides point-to-point service. The Company offers ancillary service offerings, such as Southwest’s EarlyBird Check-In and transportation of pets and unaccompanied minors, in accordance with Southwest’s respective policies.

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