Southwest Airlines (NYSE:LUV) Trading Down 4.5% – Here’s Why

Southwest Airlines Co. (NYSE:LUV) dropped 4.5% on Thursday . The stock traded as low as $31.31 and last traded at $31.33. Approximately 2,290,800 shares traded hands during mid-day trading, a decline of 62% from the average daily volume of 5,982,328 shares. The stock had previously closed at $32.80.

Analyst Ratings Changes

Several analysts recently issued reports on the company. Susquehanna upped their target price on Southwest Airlines from $33.00 to $38.00 and gave the stock a “neutral” rating in a report on Tuesday, January 7th. Morgan Stanley reiterated an “overweight” rating and set a $42.00 price objective on shares of Southwest Airlines in a research note on Wednesday, December 11th. JPMorgan Chase & Co. raised their target price on shares of Southwest Airlines from $20.00 to $26.00 and gave the company a “neutral” rating in a research note on Friday, October 25th. StockNews.com raised shares of Southwest Airlines from a “sell” rating to a “hold” rating in a research report on Monday, October 28th. Finally, Bank of America initiated coverage on shares of Southwest Airlines in a research report on Monday, November 4th. They issued a “neutral” rating and a $33.00 price objective for the company. Five investment analysts have rated the stock with a sell rating, eleven have given a hold rating and three have assigned a buy rating to the company. Based on data from MarketBeat.com, Southwest Airlines currently has a consensus rating of “Hold” and an average price target of $32.43.

Southwest Airlines Stock Performance

The company has a fifty day moving average of $32.97 and a two-hundred day moving average of $30.07. The firm has a market capitalization of $18.99 billion, a price-to-earnings ratio of -451.94, a PEG ratio of 3.27 and a beta of 1.14. The company has a debt-to-equity ratio of 0.49, a quick ratio of 0.83 and a current ratio of 0.88.

Southwest Airlines (NYSE:LUV) last posted its earnings results on Thursday, October 24th. The airline reported $0.15 earnings per share for the quarter, topping analysts’ consensus estimates 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 during the quarter, compared to the consensus estimate of $6.77 billion. During the same quarter last year, the firm earned $0.38 earnings per share. The company’s revenue was up 5.3% on a year-over-year basis. As a group, equities research analysts predict that Southwest Airlines Co. will post 0.81 earnings per share for the current fiscal year.

Southwest Airlines Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, January 16th. Shareholders of record on Thursday, December 26th will be given a dividend of $0.18 per share. The ex-dividend date is Thursday, December 26th. This represents a $0.72 dividend on an annualized basis and a dividend yield of 2.27%. Southwest Airlines’s payout ratio is presently -1,028.57%.

Insiders Place Their Bets

In related news, insider Linda B. Rutherford sold 3,849 shares of Southwest Airlines 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 completion of the transaction, the insider now owns 89,376 shares of the company’s stock, valued at $3,074,534.40. This trade represents a 4.13 % decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Also, major shareholder Elliott Investment Management sold 1,203,920 shares of the business’s stock in a transaction on Monday, October 28th. The shares were sold at an average price of $29.83, for a total transaction of $35,912,933.60. Following the completion of the transaction, the insider now owns 59,912,580 shares in the company, valued at approximately $1,787,192,261.40. The trade was a 1.97 % decrease in their position. The disclosure for this sale can be found here. Corporate insiders own 0.33% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in LUV. Franklin Resources Inc. increased its holdings in Southwest Airlines by 46.2% in the third quarter. Franklin Resources Inc. now owns 30,082,719 shares of the airline’s stock worth $932,894,000 after purchasing an additional 9,504,201 shares in the last quarter. Dimensional Fund Advisors LP grew its position in shares of Southwest Airlines by 21.6% during the 2nd quarter. Dimensional Fund Advisors LP now owns 5,828,166 shares of the airline’s stock worth $166,742,000 after buying an additional 1,034,496 shares during the period. Jacobs Levy Equity Management Inc. increased its stake in shares of Southwest Airlines by 608.5% in the 3rd quarter. Jacobs Levy Equity Management Inc. now owns 3,623,333 shares of the airline’s stock valued at $107,359,000 after acquiring an additional 3,111,946 shares in the last quarter. Charles Schwab Investment Management Inc. lifted its position in shares of Southwest Airlines by 1.4% during the 3rd quarter. Charles Schwab Investment Management Inc. now owns 3,377,660 shares of the airline’s stock valued at $100,080,000 after acquiring an additional 46,110 shares during the period. Finally, Mizuho Securities USA LLC boosted its stake in Southwest Airlines by 6,414.5% during the third quarter. Mizuho Securities USA LLC now owns 3,006,000 shares of the airline’s stock worth $89,068,000 after acquiring an additional 2,959,857 shares in the last quarter. 80.82% of the stock is owned by institutional investors.

Southwest Airlines Company Profile

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.