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Southwest Airlines (LUV) Gains But Lags Market: What You Should Know
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Southwest Airlines (LUV - Free Report) closed at $44.42 in the latest trading session, marking a +0.09% move from the prior day. This change lagged the S&P 500's 0.71% gain on the day. Meanwhile, the Dow gained 0.27%, and the Nasdaq, a tech-heavy index, added 0.14%.
Prior to today's trading, shares of the airline had lost 1.68% over the past month. This has lagged the Transportation sector's gain of 4.84% and the S&P 500's gain of 3.76% in that time.
Southwest Airlines will be looking to display strength as it nears its next earnings release, which is expected to be April 28, 2022. The company is expected to report EPS of -$0.49, up 71.51% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.56 billion, up 122.24% from the year-ago period.
LUV's full-year Zacks Consensus Estimates are calling for earnings of $1.07 per share and revenue of $21.56 billion. These results would represent year-over-year changes of +149.77% and +36.51%, respectively.
Investors should also note any recent changes to analyst estimates for Southwest Airlines. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 6.26% lower within the past month. Southwest Airlines is holding a Zacks Rank of #4 (Sell) right now.
Valuation is also important, so investors should note that Southwest Airlines has a Forward P/E ratio of 41.38 right now. For comparison, its industry has an average Forward P/E of 21.69, which means Southwest Airlines is trading at a premium to the group.
Also, we should mention that LUV has a PEG ratio of 6.9. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Transportation - Airline was holding an average PEG ratio of 6.9 at yesterday's closing price.
The Transportation - Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 206, which puts it in the bottom 19% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
View the Zacks #1 Rank List
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Southwest Airlines (LUV) Gains But Lags Market: What You Should Know
Southwest Airlines (LUV - Free Report) closed at $44.42 in the latest trading session, marking a +0.09% move from the prior day. This change lagged the S&P 500's 0.71% gain on the day. Meanwhile, the Dow gained 0.27%, and the Nasdaq, a tech-heavy index, added 0.14%.
Prior to today's trading, shares of the airline had lost 1.68% over the past month. This has lagged the Transportation sector's gain of 4.84% and the S&P 500's gain of 3.76% in that time.
Southwest Airlines will be looking to display strength as it nears its next earnings release, which is expected to be April 28, 2022. The company is expected to report EPS of -$0.49, up 71.51% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.56 billion, up 122.24% from the year-ago period.
LUV's full-year Zacks Consensus Estimates are calling for earnings of $1.07 per share and revenue of $21.56 billion. These results would represent year-over-year changes of +149.77% and +36.51%, respectively.
Investors should also note any recent changes to analyst estimates for Southwest Airlines. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 6.26% lower within the past month. Southwest Airlines is holding a Zacks Rank of #4 (Sell) right now.
Valuation is also important, so investors should note that Southwest Airlines has a Forward P/E ratio of 41.38 right now. For comparison, its industry has an average Forward P/E of 21.69, which means Southwest Airlines is trading at a premium to the group.
Also, we should mention that LUV has a PEG ratio of 6.9. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Transportation - Airline was holding an average PEG ratio of 6.9 at yesterday's closing price.
The Transportation - Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 206, which puts it in the bottom 19% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.