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Southwest Airlines (LUV) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Southwest Airlines (LUV - Free Report) closed at $28.52, marking a -1.35% move from the previous day. This change lagged the S&P 500's 0.94% loss on the day. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq lost 1.53%.

Coming into today, shares of the airline had lost 8.22% in the past month. In that same time, the Transportation sector lost 2.92%, while the S&P 500 gained 1.85%.

Investors will be hoping for strength from Southwest Airlines as it approaches its next earnings release, which is expected to be October 26, 2023. In that report, analysts expect Southwest Airlines to post earnings of $0.52 per share. This would mark year-over-year growth of 4%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.66 billion, up 7.09% from the year-ago period.

LUV's full-year Zacks Consensus Estimates are calling for earnings of $2.01 per share and revenue of $26.31 billion. These results would represent year-over-year changes of +73.28% and +10.48%, respectively.

Investors might also notice recent changes to analyst estimates for Southwest Airlines. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 4.96% lower within the past month. Southwest Airlines is currently a Zacks Rank #5 (Strong Sell).

Looking at its valuation, Southwest Airlines is holding a Forward P/E ratio of 14.37. Its industry sports an average Forward P/E of 8.11, so we one might conclude that Southwest Airlines is trading at a premium comparatively.

Investors should also note that LUV has a PEG ratio of 0.59 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Transportation - Airline industry currently had an average PEG ratio of 0.37 as of yesterday's close.

The Transportation - Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 159, which puts it in the bottom 37% 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 to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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