Southwest Airlines (NYSE:LUV) Reaches New 1-Year High – What’s Next?

Southwest Airlines Co. (NYSE:LUV) hit a new 52-week high during trading on Thursday . The company traded as high as $35.35 and last traded at $35.35, with a volume of 315000 shares trading hands. The stock had previously closed at $34.15.

Analyst Upgrades and Downgrades

LUV has been the topic of a number of research reports. JPMorgan Chase & Co. increased their price objective 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. Bank of America began coverage on shares of Southwest Airlines in a research note on Monday, November 4th. They set a “neutral” rating and a $33.00 price target on the stock. The Goldman Sachs Group reaffirmed a “sell” rating and set a $28.00 price target on shares of Southwest Airlines in a research note on Friday, November 15th. StockNews.com raised shares of Southwest Airlines from a “sell” rating to a “hold” rating in a research note on Monday, October 28th. Finally, Evercore ISI raised shares of Southwest Airlines from an “in-line” rating to an “outperform” rating and raised their price target for the stock from $30.00 to $35.00 in a research note on Tuesday, September 3rd. Four equities research analysts have rated the stock with a sell rating, twelve have issued a hold rating and three have issued a buy rating to the company. According to data from MarketBeat.com, Southwest Airlines has a consensus rating of “Hold” and an average price target of $30.61.

Southwest Airlines Price Performance

The company’s fifty day moving average is $31.29 and its 200 day moving average is $28.97. The company has a quick ratio of 0.83, a current ratio of 0.88 and a debt-to-equity ratio of 0.49. The stock has a market cap of $20.49 billion, a PE ratio of -488.14, a price-to-earnings-growth ratio of 7.70 and a beta of 1.16.

Southwest Airlines (NYSE:LUV) last posted its quarterly earnings results on Thursday, October 24th. The airline reported $0.15 EPS for the quarter, beating the consensus estimate of $0.05 by $0.10. Southwest Airlines had a negative net margin of 0.06% and a positive return on equity of 4.56%. The firm had revenue of $6.87 billion for the quarter, compared to analyst estimates of $6.77 billion. During the same quarter last year, the firm posted $0.38 earnings per share. Southwest Airlines’s revenue for the quarter was up 5.3% compared to the same quarter last year. As a group, sell-side analysts anticipate that Southwest Airlines Co. will post 0.75 earnings per share for the current fiscal year.

Southwest Airlines Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, January 16th. Investors of record on Thursday, December 26th will be issued a $0.18 dividend. The ex-dividend date of this dividend is Thursday, December 26th. This represents a $0.72 annualized dividend and a yield of 2.11%. Southwest Airlines’s payout ratio is -1,028.57%.

Insider Activity at Southwest Airlines

In related news, major shareholder Elliott Investment Management sold 1,203,920 shares of the stock in a transaction dated Monday, October 28th. The stock was sold at an average price of $29.83, for a total value of $35,912,933.60. Following the completion of the transaction, the insider now owns 59,912,580 shares of the company’s stock, valued at approximately $1,787,192,261.40. This represents a 1.97 % decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this link. Also, Director Rakesh Gangwal acquired 643,788 shares of the company’s stock in a transaction on Tuesday, October 1st. The shares were acquired at an average price of $29.98 per share, for a total transaction of $19,300,764.24. Following the completion of the acquisition, the director now directly owns 3,606,311 shares in the company, valued at $108,117,203.78. The trade was a 21.73 % increase in their ownership of the stock. The disclosure for this purchase can be found here. 0.33% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Southwest Airlines

Several hedge funds and other institutional investors have recently bought and sold shares of LUV. Franklin Resources Inc. increased its holdings in Southwest Airlines by 46.2% during the 3rd 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 during the last quarter. Jacobs Levy Equity Management Inc. increased its holdings in Southwest Airlines by 608.5% during the 3rd quarter. Jacobs Levy Equity Management Inc. now owns 3,623,333 shares of the airline’s stock worth $107,359,000 after purchasing an additional 3,111,946 shares during the last quarter. Mizuho Securities USA LLC increased its holdings in Southwest Airlines by 6,414.5% during the 3rd quarter. Mizuho Securities USA LLC now owns 3,006,000 shares of the airline’s stock worth $89,068,000 after purchasing an additional 2,959,857 shares during the last quarter. Healthcare of Ontario Pension Plan Trust Fund acquired a new position in shares of Southwest Airlines in the 2nd quarter worth approximately $48,551,000. Finally, Canada Pension Plan Investment Board grew its position in shares of Southwest Airlines by 629.5% in the 2nd quarter. Canada Pension Plan Investment Board now owns 1,590,298 shares of the airline’s stock worth $45,498,000 after acquiring an additional 1,372,305 shares in the last quarter. 80.82% of the stock is currently owned by hedge funds and other institutional investors.

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.