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

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

Other equities analysts have also recently issued reports about the stock. Morgan Stanley lifted their price target on shares of Southwest Airlines from $50.00 to $55.00 and gave the stock an “overweight” rating in a research report on Friday, January 30th. Susquehanna reduced their price target on shares of Southwest Airlines from $55.00 to $42.00 and set a “neutral” rating on the stock in a research report on Thursday, April 2nd. Bank of America reduced their price target on shares of Southwest Airlines from $42.00 to $40.00 and set an “underperform” rating on the stock in a research report on Wednesday, April 1st. BNP Paribas Exane lifted their price target on shares of Southwest Airlines from $24.00 to $33.00 and gave the stock an “underperform” rating in a research report on Tuesday, April 21st. Finally, JPMorgan Chase & Co. reduced their price target on shares of Southwest Airlines from $58.00 to $56.00 in a research report on Friday, March 27th. Nine equities research analysts have rated the stock with a Buy rating, eight have given a Hold rating and five have assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock has a consensus rating of “Hold” and a consensus price target of $43.96.

Southwest Airlines Price Performance

LUV opened at $43.25 on Wednesday. The company has a fifty day moving average price of $39.70 and a two-hundred day moving average price of $41.52. The company has a debt-to-equity ratio of 0.66, a quick ratio of 0.41 and a current ratio of 0.48. Southwest Airlines has a 52 week low of $28.98 and a 52 week high of $55.11. The firm has a market capitalization of $21.14 billion, a PE ratio of 27.91, a P/E/G ratio of 0.48 and a beta of 1.12.

Southwest Airlines (NYSE:LUV) last released its earnings results on Wednesday, April 22nd. The airline reported $0.45 EPS for the quarter, hitting analysts’ consensus estimates 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 during the quarter, compared to analyst estimates of $8.46 billion. During the same quarter in the previous year, the business earned ($0.13) EPS. The business’s quarterly revenue was up 12.8% compared to the same quarter last year. Southwest Airlines has set its Q2 2026 guidance at 0.350-0.650 EPS. As a group, analysts anticipate that Southwest Airlines will post 2.76 earnings per share for the current year.

Institutional Investors Weigh In On Southwest Airlines

Institutional investors have recently added to or reduced their stakes in the stock. SHP Wealth Management bought a new stake in Southwest Airlines in the 4th quarter valued at $25,000. GHP Investment Advisors Inc. bought a new stake in Southwest Airlines in the 4th quarter valued at $26,000. Entrust Financial LLC bought a new stake in Southwest Airlines in the 4th quarter valued at $26,000. Los Angeles Capital Management LLC bought a new stake in Southwest Airlines in the 4th quarter valued at $26,000. Finally, Optima Capital LLC bought a new stake in Southwest Airlines in the 4th quarter valued at $27,000. 80.82% of the stock is owned by institutional investors.

Southwest Airlines Company Profile

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.