Morgan Stanley’s analyst Ravi Shanker raised his target on Southwest Airlines to $56 from $54 and maintained his Overweight rating on the stock. The analyst is still very bullish on the recovery in airline traffic, and believes low-cost carriers like Southwest will do better than main stream airlines. He continues to believe the industry will return to normal traffic volume by the end of 2021, beginning of 2022.
STA Research(stocktargetadvisor) has a average target on Southwest of $43, and a consensus String Buy rating. STA’s view of the stock is Slightly Bullish with a score of 6 out of 10, where 0 is very bearish and 10 very bullish.
What to 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.
Superior return on equity
The company management has delivered better return on equity in the most recent 4 quarters then its peers, placing it in the top quartile.
The company is less leveraged than its peers ,, and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector.
Sometimes this is low because the company is not growing and has no growth potential.
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.
High Gross Profit to Asset Ratio
This stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in
the long run.
What to not like:
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 cashflow 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 to buy.
Overpriced on free cash flow basis
The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
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