Analysts rate Southwest Airlines Co. (LUV:NYE) Strong Buy, $58.50 Target

STA Research
by: STA Research

Analysts rate Southwest Airlines Co. with a consensus Strong Buy rating and a 12-month average Target Price of $58.74 per share.

Evercore ISI upgrades Southwest Airlines from In-line to Outperform at a $48 target price.

Based on the Southwest Airlines Co stock forecasts from 15 analysts, the average analyst target price for Southwest Airlines Co is USD 58.74 over the next 12 months. Southwest Airlines Co.’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of Southwest Airlines Co is Slightly Bearish, which is based on 5 positive signals and 7 negative signals. At the last closing, Southwest Airlines Co.’s stock price was USD 42.32. Southwest Airlines Co.’s stock price has changed by -1.69% over the past week, -1.97% over the past month and -26.81% over the last year.

Southwest Airlines Co. operates as a passenger airline company that provide scheduled air transportation services in the United States and near-international markets. The company was incorporated in 1967 and is headquartered in Dallas, Texas.

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Low volatility

The stock’s annual returns have been stable and consistent compared to its sector peers(for a hold period of at least 12 months) and are in the top quartile. Although stability is good, also keep in mind it can limit returns.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Superior Earnings Growth

Compared to its sector, this stock has shown top quartile earnings growth in the previous 5 years.

What we don’t like:

Poor risk-adjusted returns

This company is delivering below median risk-adjusted returns to its peers. Even if it is outperforming on returns, the returns are unpredictable. Proceed with caution.

Below median total returns

The company has underperformed its peers on annual average total returns in the past 5 years.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced compared to book value

The stock is trading high compared to its peers’ median on a price to book value basis.

Overpriced on a cash flow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering buying.

Highly leveraged

Compared to its sector peers on debt to equity, the company is in the bottom half and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

 

Leave a Reply

Your email address will not be published.