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Southwest Airlines (LUV) Gains As Market Dips: What You Should Know
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In the latest trading session, Southwest Airlines (LUV - Free Report) closed at $45.57, marking a +0.53% move from the previous day. This change outpaced the S&P 500's 0.63% loss on the day. Meanwhile, the Dow lost 0.19%, and the Nasdaq, a tech-heavy index, lost 0.34%.
Prior to today's trading, shares of the airline had gained 8.06% over the past month. This has outpaced the Transportation sector's gain of 7.05% and the S&P 500's gain of 6.02% 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. On that day, Southwest Airlines is projected to report earnings of -$0.49 per share, which would represent year-over-year growth of 71.51%. Meanwhile, our latest consensus estimate is calling for revenue of $4.56 billion, up 122.24% from the prior-year quarter.
LUV's full-year Zacks Consensus Estimates are calling for earnings of $1.06 per share and revenue of $21.65 billion. These results would represent year-over-year changes of +149.3% and +37.09%, respectively.
It is also important to note the recent changes to analyst estimates for Southwest Airlines. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 7.36% lower within the past month. Southwest Airlines is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Southwest Airlines is holding a Forward P/E ratio of 42.76. For comparison, its industry has an average Forward P/E of 22.5, which means Southwest Airlines is trading at a premium to the group.
We can also see that LUV currently has a PEG ratio of 7.13. 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 industry currently had an average PEG ratio of 7.13 as of yesterday's close.
The Transportation - Airline industry is part of the Transportation sector. This group has a Zacks Industry Rank of 180, putting it in the bottom 30% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
To follow LUV in the coming trading sessions, be sure to utilize Zacks.com.
View the Zacks #1 Rank List
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Southwest Airlines (LUV) Gains As Market Dips: What You Should Know
In the latest trading session, Southwest Airlines (LUV - Free Report) closed at $45.57, marking a +0.53% move from the previous day. This change outpaced the S&P 500's 0.63% loss on the day. Meanwhile, the Dow lost 0.19%, and the Nasdaq, a tech-heavy index, lost 0.34%.
Prior to today's trading, shares of the airline had gained 8.06% over the past month. This has outpaced the Transportation sector's gain of 7.05% and the S&P 500's gain of 6.02% 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. On that day, Southwest Airlines is projected to report earnings of -$0.49 per share, which would represent year-over-year growth of 71.51%. Meanwhile, our latest consensus estimate is calling for revenue of $4.56 billion, up 122.24% from the prior-year quarter.
LUV's full-year Zacks Consensus Estimates are calling for earnings of $1.06 per share and revenue of $21.65 billion. These results would represent year-over-year changes of +149.3% and +37.09%, respectively.
It is also important to note the recent changes to analyst estimates for Southwest Airlines. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 7.36% lower within the past month. Southwest Airlines is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Southwest Airlines is holding a Forward P/E ratio of 42.76. For comparison, its industry has an average Forward P/E of 22.5, which means Southwest Airlines is trading at a premium to the group.
We can also see that LUV currently has a PEG ratio of 7.13. 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 industry currently had an average PEG ratio of 7.13 as of yesterday's close.
The Transportation - Airline industry is part of the Transportation sector. This group has a Zacks Industry Rank of 180, putting it in the bottom 30% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
To follow LUV in the coming trading sessions, be sure to utilize Zacks.com.