Southwest Airlines Co. (LUV) Raised to Hold at Zacks Investment Research
Southwest Airlines Co. (NYSE:LUV) was upgraded by Zacks Investment Research from a “strong sell” rating to a “hold” rating in a research report issued on Tuesday.
According to Zacks, “Shares of Southwest Airlines appreciated substantially on Nov 7 following the decision of the company’s pilots to ratify a pay-related contract. The pilots’ approval comes close on the heels of flight attendants of the carrier ratifying a pay-related deal. The new deal guarantees ratification bonus and annual wage rate increases during its term. We expect the carrier’s labor costs to shoot up after the new deals. Southwest Airlines expects CASM – excluding special items and profit sharing – to increase in the band of 4–5% in the final quarter of 2016. This is substantially higher than the 2.6% increase witnessed in the third quarter. However, the decision of iconic investor Warren Buffett to bet on four airline stocks, including Southwest is a positive. We are also positive on the commencement of Cuban operations by Southwest. However, unit revenue issues continue to hurt the stock.”
LUV has been the topic of several other reports. Credit Suisse Group AG set a $48.00 price objective on Southwest Airlines and gave the company a “buy” rating in a research report on Monday, September 12th. Evercore ISI upgraded Southwest Airlines from a “hold” rating to a “buy” rating and lowered their price objective for the company from $47.00 to $37.36 in a research report on Tuesday, July 26th. Vetr upgraded Southwest Airlines from a “hold” rating to a “buy” rating and set a $38.64 target price on the stock in a research report on Tuesday, September 6th. Morgan Stanley reiterated a “hold” rating and issued a $43.00 target price on shares of Southwest Airlines in a research report on Sunday, August 21st. Finally, Sanford C. Bernstein started coverage on Southwest Airlines in a research report on Monday, October 10th. They issued an “outperform” rating and a $51.00 target price on the stock. They noted that the move was a valuation call. Six analysts have rated the stock with a hold rating and thirteen have given a buy rating to the company’s stock. The company has a consensus rating of “Buy” and an average price target of $50.42.
Southwest Airlines (NYSE:LUV) traded up 0.053% during trading on Tuesday, reaching $47.385. The company had a trading volume of 2,688,513 shares. The firm’s 50 day moving average is $41.67 and its 200 day moving average is $39.90. The company has a market capitalization of $29.17 billion, a PE ratio of 13.469 and a beta of 0.86. Southwest Airlines has a one year low of $33.96 and a one year high of $51.34.
Southwest Airlines (NYSE:LUV) last announced its quarterly earnings data on Wednesday, October 26th. The airline reported $0.93 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $0.88 by $0.05. Southwest Airlines had a return on equity of 32.51% and a net margin of 11.09%. The business had revenue of $5.10 billion for the quarter, compared to the consensus estimate of $5.17 billion. During the same period in the previous year, the business earned $0.94 earnings per share. The business’s revenue was down 3.4% on a year-over-year basis. On average, equities research analysts predict that Southwest Airlines will post $3.66 earnings per share for the current year.
The company also recently declared a quarterly dividend, which will be paid on Thursday, January 5th. Investors of record on Thursday, December 8th will be issued a $0.10 dividend. The ex-dividend date is Tuesday, December 6th. This represents a $0.40 dividend on an annualized basis and a dividend yield of 0.84%. Southwest Airlines’s payout ratio is 11.40%.
Several hedge funds have recently made changes to their positions in LUV. Bank of Montreal Can purchased a new stake in shares of Southwest Airlines during the second quarter worth about $246,179,000. JPMorgan Chase & Co. raised its stake in Southwest Airlines by 73.0% in the third quarter. JPMorgan Chase & Co. now owns 9,420,861 shares of the airline’s stock worth $366,379,000 after buying an additional 3,975,382 shares in the last quarter. AQR Capital Management LLC raised its stake in Southwest Airlines by 53.3% in the second quarter. AQR Capital Management LLC now owns 5,238,342 shares of the airline’s stock worth $205,395,000 after buying an additional 1,821,829 shares in the last quarter. Emerald Acquisition Ltd. bought a new stake in Southwest Airlines during the second quarter worth $58,545,000. Finally, Capital Fund Management S.A. raised its stake in Southwest Airlines by 472.4% in the second quarter. Capital Fund Management S.A. now owns 1,718,192 shares of the airline’s stock worth $67,370,000 after buying an additional 1,418,012 shares in the last quarter. Hedge funds and other institutional investors own 78.51% of the company’s stock.
About Southwest Airlines
Southwest Airlines Co (Southwest) operates Southwest Airlines. Southwest is a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Company serves approximately 100 destinations in over 40 states, such as the District of Columbia, the Commonwealth of Puerto Rico, and approximately seven near-international countries, including Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, and Belize.
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