Saturday, June 25, 2022

The Unprecedented Rise of Southwest Airlines Co. (NYSE:LUV)

The Southwest Airlines Co. (LUV) shares are trading at lower $32.83 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $38.94.

To add more color to this target, the company’s high over the last year is $58.83 and the low is $22.47. Over the last 52 weeks, LUV is down -44.20% while the S&P 500 is down -5.76%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, LUV reported a profit of $899.0 million. Southwest Airlines Co. also saw revenues increase to $4.23 billion. In addition, LUV has free cash flow of -$601.0 million as of 03-2020 The company’s EBITDA came in at $201.0 million which compares well with its peers.

LUV booked profit margins of 8.50%, its Return on Equity (ROE) is 18.80%, and its Return on Assets is 6.90%. All told, it is clear that, LUV needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. LUV has a short ratio of 0.85 and outstanding shares of 515.00M.

Company Outlook

LUV has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 35.32 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 3.33. Southwest Airlines Co. LUV also noted assets of $26.89 billion at the end of the last quarter. Investors should also keep an eye on sector updates as LUV has historically followed its peers on positive news.

All told, Southwest Airlines Co. LUV has strung together solid data and demonstrated underlying fundamentals. At its current valuation, LUV represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Southwest Airlines Co. LUV is now commanding a market cap of 19.40B and a float of 587.39M. LUV is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of LUV stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in LUV, either long or short, and we have not been compensated for this article.

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