Southwest Airlines (NYSE:LUV) Shares Gap Down Following Weak Earnings

Southwest Airlines Co. (NYSE:LUV)’s stock price gapped down before the market opened on Thursday following a dissappointing earnings announcement. The stock had previously closed at $29.30, but opened at $26.88. Southwest Airlines shares last traded at $26.82, with a volume of 11,313,675 shares changing hands.

The airline reported ($0.36) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.34) by ($0.02). The business had revenue of $6.33 billion during the quarter, compared to analyst estimates of $6.42 billion. Southwest Airlines had a net margin of 1.91% and a return on equity of 9.40%. The business’s revenue for the quarter was up 11.0% compared to the same quarter last year. During the same period in the previous year, the business posted ($0.27) EPS.

Southwest Airlines Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Wednesday, March 27th. Investors of record on Wednesday, March 6th were paid a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a yield of 2.70%. The ex-dividend date of this dividend was Tuesday, March 5th. Southwest Airlines’s payout ratio is 96.00%.

Wall Street Analysts Forecast Growth

Several equities research analysts recently commented on LUV shares. UBS Group started coverage on Southwest Airlines in a report on Wednesday, March 20th. They issued a “buy” rating and a $36.00 price objective for the company. StockNews.com downgraded Southwest Airlines from a “hold” rating to a “sell” rating in a research report on Friday, April 12th. JPMorgan Chase & Co. increased their price target on Southwest Airlines from $24.00 to $29.00 and gave the company a “neutral” rating in a research note on Friday, January 26th. Argus raised Southwest Airlines from a “hold” rating to a “buy” rating and set a $40.00 target price on the stock in a report on Tuesday, March 12th. Finally, Morgan Stanley dropped their price objective on Southwest Airlines from $40.00 to $38.00 and set an “overweight” rating on the stock in a report on Friday, April 5th. Four investment analysts have rated the stock with a sell rating, nine have assigned a hold rating and five have issued a buy rating to the company’s stock. According to data from MarketBeat, the stock presently has an average rating of “Hold” and a consensus target price of $31.82.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently bought and sold shares of the stock. Vontobel Holding Ltd. raised its holdings in Southwest Airlines by 9.2% during the 3rd quarter. Vontobel Holding Ltd. now owns 20,948 shares of the airline’s stock valued at $567,000 after acquiring an additional 1,766 shares during the period. CWM LLC grew its stake in shares of Southwest Airlines by 18.2% in the third quarter. CWM LLC now owns 19,608 shares of the airline’s stock worth $531,000 after purchasing an additional 3,019 shares during the last quarter. AE Wealth Management LLC raised its stake in Southwest Airlines by 33.7% in the third quarter. AE Wealth Management LLC now owns 80,881 shares of the airline’s stock worth $2,189,000 after buying an additional 20,397 shares in the last quarter. Oak Thistle LLC bought a new position in shares of Southwest Airlines during the third quarter valued at approximately $1,702,000. Finally, Czech National Bank increased its position in shares of Southwest Airlines by 47.8% during the third quarter. Czech National Bank now owns 104,104 shares of the airline’s stock valued at $2,818,000 after acquiring an additional 33,660 shares in the last quarter. 80.82% of the stock is owned by institutional investors.

Southwest Airlines Stock Down 9.1 %

The company has a debt-to-equity ratio of 0.76, a current ratio of 1.14 and a quick ratio of 1.07. The company’s 50-day moving average is $30.62 and its two-hundred day moving average is $28.54. The company has a market cap of $15.93 billion, a P/E ratio of 35.15, a P/E/G ratio of 1.04 and a beta of 1.15.

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.