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Southwest Airlines (LUV) Stock Moves -0.7%: What You Should Know

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The most recent trading session ended with Southwest Airlines (LUV - Free Report) standing at $24.20, reflecting a -0.7% shift from the previouse trading day's closing. This change was narrower than the S&P 500's 1.26% loss on the day. On the other hand, the Dow registered a loss of 0.86%, and the technology-centric Nasdaq decreased by 1.54%.

The airline's shares have seen a decrease of 13.83% over the last month, not keeping up with the Transportation sector's loss of 5.81% and the S&P 500's loss of 3.67%.

Investors will be eagerly watching for the performance of Southwest Airlines in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on October 26, 2023. The company's upcoming EPS is projected at $0.40, signifying a 20% drop compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $6.58 billion, indicating a 5.73% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $1.70 per share and a revenue of $26.12 billion, demonstrating changes of +46.55% and +9.7%, respectively, from the preceding year.

Investors should also take note of any recent adjustments to analyst estimates for Southwest Airlines. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 13.3% lower. Southwest Airlines currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, Southwest Airlines is currently trading at a Forward P/E ratio of 14.31. Its industry sports an average Forward P/E of 6.62, so one might conclude that Southwest Airlines is trading at a premium comparatively.

It is also worth noting that LUV currently has a PEG ratio of 0.72. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Transportation - Airline industry had an average PEG ratio of 0.32.

The Transportation - Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 236, which puts it in the bottom 7% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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