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In the latest trading session, Southwest Airlines (LUV) closed at $35.63, marking a +1.86% move from the previous day. This move outpaced the S&P 500's daily gain of 0.22%. Elsewhere, the Dow lost 0.13%, while the tech-heavy Nasdaq added 0.2%.
Heading into today, shares of the airline had lost 19.72% over the past month, lagging the Transportation sector's loss of 8.06% and the S&P 500's loss of 8.32% in that time.
Southwest Airlines will be looking to display strength as it nears its next earnings release, which is expected to be July 28, 2022. On that day, Southwest Airlines is projected to report earnings of $1.13 per share, which would represent year-over-year growth of 422.86%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.64 billion, up 65.65% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.67 per share and revenue of $24.27 billion. These totals would mark changes of +224.19% and +53.71%, respectively, from last year.
Any recent changes to analyst estimates for Southwest Airlines should also be noted by investors. Recent revisions tend to reflect the latest 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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 5.28% higher. Southwest Airlines is currently sporting a Zacks Rank of #1 (Strong Buy).
Valuation is also important, so investors should note that Southwest Airlines has a Forward P/E ratio of 13.08 right now. This represents a discount compared to its industry's average Forward P/E of 17.31.
It is also worth noting that LUV currently has a PEG ratio of 2.18. 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. Transportation - Airline stocks are, on average, holding a PEG ratio of 2.18 based on yesterday's closing prices.
The Transportation - Airline industry is part of the Transportation sector. This group has a Zacks Industry Rank of 196, putting it in the bottom 23% 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.