Weak fundamental momentum pushes Southwest Airlines Co. (LUV) lower

Southwest Airlines Co. (NYSE:LUV) has a beta value of 1.29 and has seen 6,901,000 shares traded in the recent trading session. The company, currently valued at $24.78 Billion, closed the recent trade at $42.1 per share which meant it gained $1.49 on the day or 3.67% during that session. The LUV stock price is -39.74% off its 52-week high price of $58.83 and 46.63% above the 52-week low of $22.47. If we look at the company’s 10-day average daily trading volume, we find that it stood at 10.81 Million shares traded. The 3-month trading volume is 13.95 Million shares.

The consensus among analysts is that Southwest Airlines Co. (LUV) is an Overweight stock at the moment, with a recommendation rating of 2.2. None of the analysts rate the stock as a Sell, while none rate it as Overweight. 8 out of 21 have rated it as a Hold, with 13 advising it as a Buy. None have rated the stock as Underweight. The expected earnings per share for the stock is -$2.33.

Sporting 3.67% in the green today, the stock has traded in the green over the last five days, with the highest price hit on Wednesday, Sep 16 when the LUV stock price touched $42.05- or saw a rise of 0.1%. Year-to-date, Southwest Airlines Co. shares have moved -22.17%, while the 5-day performance has seen it change 7.11%. Over the past 30 days, the shares of Southwest Airlines Co. (NYSE:LUV) have changed 20.37%. Short interest in the company has seen 15.29 Million shares shorted with days to cover at 1.1.

Wall Street analysts have a consensus price target for the stock at $43, which means that the shares’ value could jump 2.14% from current levels. The projected low price target is $29 while the price target rests at a high of $54. In that case, then, we find that the current price level is +28.27% off the targeted high while a plunge would see the stock lose -31.12% from current levels.

Southwest Airlines Co. (LUV) estimates and forecasts

Figures show that Southwest Airlines Co. shares have underperformed across the wider relevant industry. The company’s shares have gained +6.17% over the past 6 months, with this year growth rate of -249.65%, compared to -42.5% for the industry. Other than that, the company has, however, lowered its growth outlook for the 2020 fiscal year revenue. Growth estimates for the current quarter are -289.4% and -218.4% for the next quarter. Revenue growth from the last financial year stood is estimated to be -56.7%.

11 analysts offering their estimates for the company have set an average revenue estimate of $1.71 Billion for the current quarter. 11 have an estimated revenue figure of $2.75 Billion for the next quarter concluding in December 01, 2020. Year-ago sales stood $5.64 Billion and $5.73 Billion respectively for this quarter and the next, and analysts expect sales will grow by -69.6% for the current quarter and -52.1% for the next.

If we evaluate the company’s growth over the last 5-year and for the next 5-year period, we find that annual earnings growth was +20.8% over the past 5 years. Earnings growth for 2020 is a modest -2% while over the next 5 years, the company’s earnings are expected to increase by -7.94%.

Southwest Airlines Co. (NYSE:LUV)’s Major holders

Insiders own 0.25% of the company shares, while shares held by institutions stand at 76.34% with a share float percentage of 76.53%. Investors are also buoyed by the number of investors in a company, with Southwest Airlines Co. having a total of 1142 institutions that hold shares in the company. The top two institutional holders are Primecap Management Company with over 69.19 Million shares worth more than $2.36 Billion. As of June 29, 2020, Primecap Management Company held 11.73% of shares outstanding.

The other major institutional holder is State Street Corporation, with the holding of over 43.75 Million shares as of June 29, 2020. The firm’s total holdings are worth over $1.5 Billion and represent 7.42% of shares outstanding.

Also the top two Mutual Funds that are holding company’s shares are Vanguard/Primecap Fund and Vanguard Total Stock Market Index Fund. As of June 29, 2020, the former fund manager holds about 5.85% shares in the company for having 34505056 shares of worth $1.18 Billion while later fund manager owns 16.81 Million shares of worth $574.63 Million as of June 29, 2020, which makes it owner of about 2.85% of company’s outstanding stock.

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