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Strong Liquidity Boosts Southwest (LUV), Fuel Costs High
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We have recently updated a report on Southwest Airlines Co. (LUV - Free Report) . The long-term expected earnings per share (three to five years) growth rate for Southwest Airlines is pegged at 6%.
The company’s liquidity position raises optimism in the stock. At the end of the third quarter, the carrier’s cash and cash equivalents stood at $12,980 million, higher than the current maturities of long-term debt of $225 million. This indicates that the company has sufficient cash to meet its current debt obligations.
LUV expects to reap profits in the fourth quarter owing to a strong Thanksgiving holiday travel period, higher fares and benefits from the co-brand credit card agreement with Chase. The carrier expects operating revenues to improve sequentially in the fourth quarter. It hopes to generate strong profits and margins in 2022 as well.
Rising fuel prices are hurting the bottom line. Fuel costs per gallon, including fuel tax (economic), rose 65.9% year over year to $2.04 in the third quarter. For the fourth quarter, the company estimates economic fuel costs per gallon to be between $2.15 and $2.25. Fuel cost per gallon is estimated in the range of $2.05-$2.15 for first-quarter 2022 as well as the full year.
The long-term expected earnings per share (three to five years) growth rate for J.B. Hunt is pegged at 15%. JBHT is benefiting from strong performances across all the segments. While the Dedicated Contract Services (DCS) unit is being aided by fleet-productivity improvement and a rise in average revenue-producing trucks, the Integrated Capacity Solutions (ICS) unit is gaining from favorable customer freight mix as well as higher contractual and spot rates.
JBHT measures to reward shareholders are encouraging. Driven by the tailwinds, the stock has increased 44.3% in the past year. J.B. Hunt currently carries a Zacks Rank #2 (Buy).
The long-term expected earnings per share (three to five years) growth rate for Landstar is pegged at 12%. LSTR is benefitting from a gradual recovery in the economy and freight market conditions in the United States.
LSTR’s top and the bottom line increased substantially in each quarter from third-quarter 2020, owing to robust revenues in the primary segment — truck transportation. LSTR has surged 27% in the past year. Landstar carries a Zacks Rank #2 presently.
The long-term expected earnings per share (three to five years) growth rate for C.H. Robinson is pegged at 9%. CHRW benefits from higher pricing and volumes across most of its service lines. Total revenues jumped 42.4% year over year in the first nine months of 2021, with higher revenues across all the segments.
CHRW’s measures to reward its shareholders are encouraging. Driven by the tailwinds, the stock has moved up 8.2% in the past year. C.H. Robinson currently sports a Zacks Rank #1.
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Strong Liquidity Boosts Southwest (LUV), Fuel Costs High
We have recently updated a report on Southwest Airlines Co. (LUV - Free Report) . The long-term expected earnings per share (three to five years) growth rate for Southwest Airlines is pegged at 6%.
The company’s liquidity position raises optimism in the stock. At the end of the third quarter, the carrier’s cash and cash equivalents stood at $12,980 million, higher than the current maturities of long-term debt of $225 million. This indicates that the company has sufficient cash to meet its current debt obligations.
LUV expects to reap profits in the fourth quarter owing to a strong Thanksgiving holiday travel period, higher fares and benefits from the co-brand credit card agreement with Chase. The carrier expects operating revenues to improve sequentially in the fourth quarter. It hopes to generate strong profits and margins in 2022 as well.
Rising fuel prices are hurting the bottom line. Fuel costs per gallon, including fuel tax (economic), rose 65.9% year over year to $2.04 in the third quarter. For the fourth quarter, the company estimates economic fuel costs per gallon to be between $2.15 and $2.25. Fuel cost per gallon is estimated in the range of $2.05-$2.15 for first-quarter 2022 as well as the full year.
Zacks Rank & Other Stocks to Consider
Southwest Airlines currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Some better-ranked stocks in the broader Zacks Transportation sector are J.B. Hunt Transport Services, Inc. (JBHT - Free Report) , Landstar System, Inc. (LSTR - Free Report) and C.H. Robinson Worldwide, Inc. (CHRW - Free Report) .
The long-term expected earnings per share (three to five years) growth rate for J.B. Hunt is pegged at 15%. JBHT is benefiting from strong performances across all the segments. While the Dedicated Contract Services (DCS) unit is being aided by fleet-productivity improvement and a rise in average revenue-producing trucks, the Integrated Capacity Solutions (ICS) unit is gaining from favorable customer freight mix as well as higher contractual and spot rates.
JBHT measures to reward shareholders are encouraging. Driven by the tailwinds, the stock has increased 44.3% in the past year. J.B. Hunt currently carries a Zacks Rank #2 (Buy).
The long-term expected earnings per share (three to five years) growth rate for Landstar is pegged at 12%. LSTR is benefitting from a gradual recovery in the economy and freight market conditions in the United States.
LSTR’s top and the bottom line increased substantially in each quarter from third-quarter 2020, owing to robust revenues in the primary segment — truck transportation. LSTR has surged 27% in the past year. Landstar carries a Zacks Rank #2 presently.
The long-term expected earnings per share (three to five years) growth rate for C.H. Robinson is pegged at 9%. CHRW benefits from higher pricing and volumes across most of its service lines. Total revenues jumped 42.4% year over year in the first nine months of 2021, with higher revenues across all the segments.
CHRW’s measures to reward its shareholders are encouraging. Driven by the tailwinds, the stock has moved up 8.2% in the past year. C.H. Robinson currently sports a Zacks Rank #1.