Southwest Airlines (LUV) Gains But Lags Market: What You Should Know

Zacks Equity Research
·2-min read

Southwest Airlines (LUV) closed the most recent trading day at $56.92, moving +1.5% from the previous trading session. This move lagged the S&P 500's daily gain of 1.95%. Meanwhile, the Dow gained 1.85%, and the Nasdaq, a tech-heavy index, added 1.55%.

Heading into today, shares of the airline had gained 14.15% over the past month, outpacing the Transportation sector's gain of 3.15% and the S&P 500's loss of 2.45% in that time.

Investors will be hoping for strength from LUV as it approaches its next earnings release. The company is expected to report EPS of -$1.87, down 1146.67% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.98 billion, down 53.15% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of -$1.80 per share and revenue of $13.99 billion. These totals would mark changes of +71.06% and +54.65%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for LUV. 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. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 11.16% lower. LUV is holding a Zacks Rank of #4 (Sell) right now.

The Transportation - Airline industry is part of the Transportation sector. This group has a Zacks Industry Rank of 242, putting it in the bottom 6% 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.

To follow LUV in the coming trading sessions, be sure to utilize Zacks.com.


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