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 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 traded.

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

Southwest Airlines Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Wednesday, March 27th. Stockholders of record on Wednesday, March 6th were given a $0.18 dividend. The ex-dividend date was Tuesday, March 5th. This represents a $0.72 annualized dividend and a dividend yield of 2.64%. Southwest Airlines’s dividend payout ratio (DPR) is 96.00%.

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on LUV. StockNews.com lowered shares of Southwest Airlines from a “hold” rating to a “sell” rating in a research note on Friday, April 12th. Jefferies Financial Group raised Southwest Airlines from an “underperform” rating to a “hold” rating and lifted their price target for the stock from $20.00 to $28.00 in a research note on Wednesday, March 13th. Barclays reduced their price objective on Southwest Airlines from $32.00 to $30.00 and set an “equal weight” rating for the company in a research note on Friday, April 5th. Raymond James raised their price objective on Southwest Airlines from $34.00 to $36.00 and gave the company an “outperform” rating in a report on Friday, January 26th. Finally, UBS Group began coverage on shares of Southwest Airlines in a report on Wednesday, March 20th. They set a “buy” rating and a $36.00 target price for the company. Four investment analysts have rated the stock with a sell rating, nine have assigned a hold rating and five have given a buy rating to the stock. According to data from MarketBeat, Southwest Airlines currently has an average rating of “Hold” and an average price target of $31.82.

Institutional Investors Weigh In On Southwest Airlines

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. Hexagon Capital Partners LLC increased its position in shares of Southwest Airlines by 374.0% during the 4th quarter. Hexagon Capital Partners LLC now owns 858 shares of the airline’s stock worth $25,000 after purchasing an additional 677 shares during the last quarter. Capital Advisors Ltd. LLC increased its position in shares of Southwest Airlines by 82.8% during the fourth quarter. Capital Advisors Ltd. LLC now owns 914 shares of the airline’s stock valued at $26,000 after acquiring an additional 414 shares during the last quarter. First Horizon Advisors Inc. acquired a new stake in shares of Southwest Airlines during the fourth quarter valued at about $29,000. ICA Group Wealth Management LLC purchased a new stake in shares of Southwest Airlines in the 4th quarter valued at approximately $29,000. Finally, Motco lifted its holdings in shares of Southwest Airlines by 151.0% in the 3rd quarter. Motco now owns 1,187 shares of the airline’s stock worth $32,000 after acquiring an additional 714 shares during the last quarter. Hedge funds and other institutional investors own 80.82% of the company’s stock.

Southwest Airlines Price Performance

The company has a debt-to-equity ratio of 0.76, a quick ratio of 1.07 and a current ratio of 1.14. The stock’s 50-day moving average is $30.48 and its two-hundred day moving average is $28.53. The stock has a market cap of $16.31 billion, a PE ratio of 36.34, a PEG ratio of 1.04 and a beta of 1.15.

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.