Zacks Research Downgrades Southwest Airlines (NYSE:LUV) to Strong Sell

Southwest Airlines (NYSE:LUV) was downgraded by research analysts at Zacks Research from a “hold” rating to a “strong sell” rating in a research note issued to investors on Wednesday,Zacks.com reports.

Several other brokerages have also recently commented on LUV. HSBC raised shares of Southwest Airlines from a “reduce” rating to a “hold” rating and boosted their price target for the stock from $24.40 to $36.10 in a research report on Friday, April 24th. Seaport Research Partners boosted their price target on shares of Southwest Airlines from $57.00 to $58.00 in a research report on Thursday, January 29th. Raymond James Financial upped their target price on shares of Southwest Airlines from $45.00 to $55.00 and gave the company an “outperform” rating in a report on Friday, April 24th. Susquehanna dropped their target price on shares of Southwest Airlines from $55.00 to $42.00 and set a “neutral” rating on the stock in a report on Thursday, April 2nd. Finally, BMO Capital Markets dropped their target price on shares of Southwest Airlines from $57.50 to $45.00 and set an “outperform” rating on the stock in a report on Tuesday, March 31st. Nine equities research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and five have issued a Sell rating to the company’s stock. According to MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus price target of $43.96.

Southwest Airlines Trading Down 1.0%

Shares of NYSE:LUV opened at $43.25 on Wednesday. The company’s 50-day moving average price is $39.70 and its two-hundred day moving average price is $41.52. The company has a debt-to-equity ratio of 0.66, a current ratio of 0.48 and a quick ratio of 0.41. Southwest Airlines has a one year low of $28.98 and a one year high of $55.11. The stock has a market capitalization of $21.14 billion, a PE ratio of 27.91, a price-to-earnings-growth ratio of 0.48 and a beta of 1.12.

Southwest Airlines (NYSE:LUV) last issued its quarterly earnings results on Wednesday, April 22nd. The airline reported $0.45 EPS for the quarter, hitting the consensus estimate of $0.45. Southwest Airlines had a net margin of 2.83% and a return on equity of 10.66%. The firm had revenue of $7.25 billion for the quarter, compared to analysts’ expectations of $8.46 billion. During the same period in the previous year, the firm posted ($0.13) EPS. The company’s revenue for the quarter was up 12.8% on a year-over-year basis. Southwest Airlines has set its Q2 2026 guidance at 0.350-0.650 EPS. On average, equities analysts forecast that Southwest Airlines will post 2.76 EPS for the current fiscal year.

Institutional Investors Weigh In On Southwest Airlines

A number of institutional investors and hedge funds have recently modified their holdings of LUV. SHP Wealth Management bought a new stake in shares of Southwest Airlines in the 4th quarter valued at about $25,000. GHP Investment Advisors Inc. acquired a new position in Southwest Airlines in the 4th quarter valued at about $26,000. Entrust Financial LLC acquired a new position in Southwest Airlines in the 4th quarter valued at about $26,000. Los Angeles Capital Management LLC acquired a new position in Southwest Airlines in the 4th quarter valued at about $26,000. Finally, Optima Capital LLC acquired a new position in Southwest Airlines in the 4th quarter valued at about $27,000. 80.82% of the stock is owned by institutional investors.

About Southwest Airlines

Southwest Airlines Co is a U.S.-based low-cost carrier that operates a point-to-point domestic and near-international airline network. Headquartered in Dallas, Texas, the company primarily flies Boeing 737 aircraft and offers no-frills, single-class service designed to keep fares competitive. Southwest’s operating model emphasizes high aircraft utilization, quick turnaround times and an open seating policy, allowing customers to board and select seats on a first-come, first-served basis.

Founded in 1967 by Herb Kelleher and Rollin King as Air Southwest Company, Southwest began commercial service in 1971, initially connecting Dallas, Houston and San Antonio.