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Southwest Airlines (LUV) Dips More Than Broader Markets: What You Should Know

Southwest Airlines (LUV) closed at $30.03 in the latest trading session, marking a -1.48% move from the prior day. This change lagged the S&P 500's 1.1% loss on the day. Elsewhere, the Dow lost 1.19%, while the tech-heavy Nasdaq lost 3.27%.

Coming into today, shares of the airline had lost 13.92% in the past month. In that same time, the Transportation sector lost 3.64%, while the S&P 500 lost 3.02%.

Wall Street will be looking for positivity from Southwest Airlines as it approaches its next earnings report date. This is expected to be April 27, 2023. The company is expected to report EPS of -$0.16, up 50% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.75 billion, up 22.39% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.68 per share and revenue of $27.22 billion. These totals would mark changes of +131.03% and +14.29%, respectively, from last year.

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Investors should also note any recent changes to analyst estimates for Southwest Airlines. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 0.98% lower within the past month. Southwest Airlines currently has a Zacks Rank of #5 (Strong Sell).

Valuation is also important, so investors should note that Southwest Airlines has a Forward P/E ratio of 11.35 right now. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 11.35.

It is also worth noting that LUV currently has a PEG ratio of 0.43. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. LUV's industry had an average PEG ratio of 0.36 as of yesterday's close.

The Transportation - Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 48, which puts it in the top 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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Southwest Airlines Co. (LUV) : Free Stock Analysis Report

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