Southwest Airlines (NYSE:LUV) Shares Gap Down After Earnings Miss

Shares of Southwest Airlines Co. (NYSE:LUV) gapped down before the market opened on Thursday following a weaker than expected 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.

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

Southwest Airlines Announces Dividend

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

Analyst Upgrades and Downgrades

Several brokerages have weighed in on LUV. StockNews.com downgraded Southwest Airlines from a “hold” rating to a “sell” rating in a research note on Friday, April 12th. Deutsche Bank Aktiengesellschaft raised Southwest Airlines from a “hold” rating to a “buy” rating and lifted their target price for the company from $28.00 to $42.00 in a research note on Tuesday, February 20th. Barclays cut their target price on Southwest Airlines from $32.00 to $30.00 and set an “equal weight” rating on the stock in a research note on Friday, April 5th. Sanford C. Bernstein raised Southwest Airlines from an “underperform” rating to a “market perform” rating and lifted their target price for the company from $26.00 to $32.00 in a research note on Tuesday, February 20th. Finally, JPMorgan Chase & Co. lifted their target price on Southwest Airlines from $24.00 to $29.00 and gave the company a “neutral” rating in a research note on Friday, January 26th. Four research analysts have rated the stock with a sell rating, nine have assigned a hold rating and five have issued a buy rating to the company. According to data from MarketBeat, Southwest Airlines presently has an average rating of “Hold” and a consensus price target of $31.82.

Hedge Funds Weigh In On Southwest Airlines

A number of hedge funds have recently modified their holdings of LUV. Hexagon Capital Partners LLC grew its holdings in shares of Southwest Airlines by 374.0% in the 4th quarter. Hexagon Capital Partners LLC now owns 858 shares of the airline’s stock worth $25,000 after acquiring an additional 677 shares during the last quarter. Capital Advisors Ltd. LLC grew its holdings in shares of Southwest Airlines by 82.8% in the 4th quarter. Capital Advisors Ltd. LLC now owns 914 shares of the airline’s stock worth $26,000 after acquiring an additional 414 shares during the last quarter. First Horizon Advisors Inc. acquired a new position in shares of Southwest Airlines in the 4th quarter worth $29,000. ICA Group Wealth Management LLC acquired a new position in shares of Southwest Airlines in the 4th quarter worth $29,000. Finally, Motco grew 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. 80.82% of the stock is currently owned by institutional investors and hedge funds.

Southwest Airlines Stock Down 7.0 %

The company has a current ratio of 1.14, a quick ratio of 1.07 and a debt-to-equity ratio of 0.76. The firm has a market capitalization of $16.31 billion, a price-to-earnings ratio of 36.34, a PEG ratio of 1.04 and a beta of 1.15. The stock has a fifty day moving average of $30.48 and a 200-day moving average of $28.53.

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.