Southwest Airlines (LUV) Suffers a Larger Drop Than the General Market: Key Insights
In the latest trading session, Southwest Airlines (LUV) closed at $28.45, marking a -0.8% move from the previous day. This change lagged the S&P 500's daily loss of 0.14%. Elsewhere, the Dow saw a downswing of 0.77%, while the tech-heavy Nasdaq appreciated by 0.17%.
Prior to today's trading, shares of the airline had lost 16.24% over the past month. This has lagged the Transportation sector's gain of 2.91% and the S&P 500's gain of 5.34% in that time.
The upcoming earnings release of Southwest Airlines will be of great interest to investors. The company's earnings report is expected on April 25, 2024. The company is predicted to post an EPS of -$0.23, indicating a 14.81% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $6.47 billion, indicating a 13.3% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $1.70 per share and revenue of $28.63 billion, which would represent changes of +8.28% and +9.72%, respectively, from the prior year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections 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 suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 7.91% downward. Right now, Southwest Airlines possesses a Zacks Rank of #3 (Hold).
Digging into valuation, Southwest Airlines currently has a Forward P/E ratio of 16.89. This represents a premium compared to its industry's average Forward P/E of 8.59.
Investors should also note that LUV has a PEG ratio of 0.87 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Transportation - Airline industry had an average PEG ratio of 0.77.
The Transportation - Airline industry is part of the Transportation sector. This group has a Zacks Industry Rank of 62, putting it in the top 25% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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Southwest Airlines Co. (LUV) : Free Stock Analysis Report
