Southwest Airlines (NYSE:LUV) Shares Gap Up – Still a Buy?

Southwest Airlines Co. (NYSE:LUV)’s share price gapped up prior to trading on Tuesday . The stock had previously closed at $28.18, but opened at $32.28. Southwest Airlines shares last traded at $30.52, with a volume of 8,902,817 shares.

Analysts Set New Price Targets

LUV has been the topic of several recent research reports. Sanford C. Bernstein upped their target price on shares of Southwest Airlines from $30.00 to $33.00 and gave the company a “market perform” rating in a research report on Wednesday, December 11th. UBS Group raised their price objective on Southwest Airlines from $27.00 to $29.00 and gave the company a “sell” rating in a research note on Tuesday, January 7th. Morgan Stanley reissued an “overweight” rating and set a $42.00 target price on shares of Southwest Airlines in a research report on Wednesday, December 11th. Bank of America reiterated an “underperform” rating and set a $31.00 price target (down from $33.00) on shares of Southwest Airlines in a report on Friday, January 17th. Finally, JPMorgan Chase & Co. reissued an “underweight” rating and issued a $25.00 price objective on shares of Southwest Airlines in a research note on Monday, March 3rd. Seven equities research analysts have rated the stock with a sell rating, eight have assigned a hold rating and four have assigned a buy rating to the stock. Based on data from MarketBeat, Southwest Airlines currently has a consensus rating of “Hold” and a consensus target price of $31.72.

Southwest Airlines Price Performance

The company has a current ratio of 0.92, a quick ratio of 0.85 and a debt-to-equity ratio of 0.49. The firm has a market capitalization of $17.63 billion, a PE ratio of 41.38, a P/E/G ratio of 0.97 and a beta of 1.10. The firm’s fifty day moving average price is $31.34 and its 200 day moving average price is $31.18.

Southwest Airlines (NYSE:LUV) last issued its quarterly earnings data on Thursday, January 30th. The airline reported $0.56 EPS for the quarter, topping analysts’ consensus estimates of $0.45 by $0.11. Southwest Airlines had a net margin of 1.69% and a return on equity of 5.77%. As a group, equities analysts forecast that Southwest Airlines Co. will post 1.55 earnings per share for the current year.

Southwest Airlines Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, April 2nd. Shareholders of record on Wednesday, March 12th will be paid a dividend of $0.18 per share. The ex-dividend date is Wednesday, March 12th. This represents a $0.72 annualized dividend and a yield of 2.42%. Southwest Airlines’s dividend payout ratio (DPR) is currently 100.00%.

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the company. Studio Investment Management LLC boosted its position in Southwest Airlines by 5.2% during the third quarter. Studio Investment Management LLC now owns 6,978 shares of the airline’s stock worth $207,000 after acquiring an additional 343 shares during the last quarter. TD Private Client Wealth LLC boosted its holdings in shares of Southwest Airlines by 41.1% during the 3rd quarter. TD Private Client Wealth LLC now owns 1,184 shares of the airline’s stock worth $35,000 after purchasing an additional 345 shares during the last quarter. Avior Wealth Management LLC grew its position in shares of Southwest Airlines by 3.8% in the fourth quarter. Avior Wealth Management LLC now owns 10,116 shares of the airline’s stock valued at $340,000 after purchasing an additional 369 shares in the last quarter. V Square Quantitative Management LLC increased its holdings in shares of Southwest Airlines by 3.9% in the fourth quarter. V Square Quantitative Management LLC now owns 9,822 shares of the airline’s stock valued at $330,000 after purchasing an additional 369 shares during the last quarter. Finally, Wahed Invest LLC lifted its position in Southwest Airlines by 11.5% during the third quarter. Wahed Invest LLC now owns 3,638 shares of the airline’s stock worth $108,000 after buying an additional 375 shares in the last quarter. 80.82% of the stock is owned by institutional investors and hedge funds.

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.