Southwest Airlines (LUV) Gains But Lags Market: What You Should Know
Southwest Airlines (LUV) closed the most recent trading day at $34.83, moving +0.78% from the previous trading session. This change lagged the S&P 500's 1.03% gain on the day. Meanwhile, the Dow gained 0.34%, and the Nasdaq, a tech-heavy index, added 1.51%.
Shares of the airline have appreciated by 12.43% over the course of the past month, outperforming the Transportation sector's gain of 2.12% and the S&P 500's gain of 3.21%.
Investors will be eagerly watching for the performance of Southwest Airlines in its upcoming earnings disclosure. The company is expected to report EPS of -$0.05, up 81.48% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.46 billion, up 13.15% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $1.86 per share and revenue of $28.59 billion, which would represent changes of +18.47% and +9.59%, respectively, from the prior year.
It is also important to note the 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.42% higher. Southwest Airlines is currently a Zacks Rank #3 (Hold).
Looking at valuation, Southwest Airlines is presently trading at a Forward P/E ratio of 18.53. This denotes a premium relative to the industry's average Forward P/E of 8.32.
It's also important to note that LUV currently trades at a PEG ratio of 1.08. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Transportation - Airline industry stood at 0.6 at the close of the market yesterday.
The Transportation - Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 23% of all 250+ industries.
The Zacks Industry Rank is ordered 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Southwest Airlines Co. (LUV) : Free Stock Analysis Report
