Southwest Airlines (NYSE:LUV) Shares Gap Down After Earnings Miss

Southwest Airlines Co. (NYSE:LUV)’s share price gapped down before the market opened on Thursday following a weaker than expected 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 traded.

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

Southwest Airlines Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Wednesday, March 27th. Stockholders of record on Wednesday, March 6th were issued a dividend of $0.18 per share. This represents a $0.72 dividend on an annualized basis and a dividend yield of 2.66%. The ex-dividend date was Tuesday, March 5th. Southwest Airlines’s payout ratio is currently 96.00%.

Analyst Upgrades and Downgrades

LUV has been the topic of a number of recent research reports. Susquehanna lowered their target price on Southwest Airlines from $30.00 to $27.00 and set a “neutral” rating on the stock in a report on Tuesday, April 9th. Raymond James reissued an “outperform” rating and issued a $30.00 target price (down previously from $33.00) on shares of Southwest Airlines in a report on Friday. UBS Group initiated coverage on Southwest Airlines in a research note on Wednesday, March 20th. They issued a “buy” rating and a $36.00 price objective on the stock. Sanford C. Bernstein raised Southwest Airlines from an “underperform” rating to a “market perform” rating and raised their price objective for the stock from $26.00 to $32.00 in a research note on Tuesday, February 20th. Finally, Morgan Stanley decreased their price objective on Southwest Airlines from $40.00 to $38.00 and set an “overweight” rating on the stock in a research note on Friday, April 5th. Four investment analysts have rated the stock with a sell rating, nine have assigned a hold rating and five have assigned a buy rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Hold” and a consensus target price of $31.18.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in LUV. Czech National Bank raised its position in shares of Southwest Airlines by 47.8% in the 3rd quarter. Czech National Bank now owns 104,104 shares of the airline’s stock valued at $2,818,000 after purchasing an additional 33,660 shares during the last quarter. Handelsbanken Fonder AB raised its position in shares of Southwest Airlines by 2.6% in the 3rd quarter. Handelsbanken Fonder AB now owns 91,040 shares of the airline’s stock valued at $2,464,000 after purchasing an additional 2,281 shares during the last quarter. Country Club Bank GFN raised its position in shares of Southwest Airlines by 4.0% in the 3rd quarter. Country Club Bank GFN now owns 109,133 shares of the airline’s stock valued at $2,971,000 after purchasing an additional 4,207 shares during the last quarter. FAS Wealth Partners Inc. raised its position in shares of Southwest Airlines by 4.7% in the 3rd quarter. FAS Wealth Partners Inc. now owns 38,166 shares of the airline’s stock valued at $1,033,000 after purchasing an additional 1,705 shares during the last quarter. Finally, Xponance Inc. raised its position in shares of Southwest Airlines by 3.4% in the 3rd quarter. Xponance Inc. now owns 77,883 shares of the airline’s stock valued at $2,108,000 after purchasing an additional 2,558 shares during the last quarter. 80.82% of the stock is currently owned by institutional investors.

Southwest Airlines Stock Down 0.8 %

The company has a current ratio of 1.14, a quick ratio of 1.07 and a debt-to-equity ratio of 0.76. The stock has a market capitalization of $16.17 billion, a PE ratio of 36.05, a price-to-earnings-growth ratio of 1.04 and a beta of 1.15. The company’s 50-day moving average is $30.34 and its 200 day moving average is $28.53.

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.