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Southwest Airlines: Analysts’ Recommendations

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Bullish stance

Southwest Airlines’ (LUV) impressive back-to-back quarterly performances and a healthy demand environment for passenger travel demand have instilled confidence among analysts, which is reflected in the ratings.

Analysts have maintained the “buy” recommendations on Southwest Airlines. On November 6, six of the 18 analysts gave a “strong buy” rating, seven gave “buy” rating, four gave a “hold” rating, and one gave a “sell” rating. About 72% of the analysts were bullish on the stock, 22% were neutral, and 6% were bearish.

Wall Street’s target price of $63.33 represents an upside of 23.2% from the current market price of $51.42. In 2017, the stock gained ~31%.

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Peers’ ratings

Analysts are bullish for the entire airline industry and gave “buy” recommendations to Southwest Airlines’ peers United Continental Holdings (UAL), Delta Air Lines (DAL), American Airlines (AAL), and Alaska Air Group (ALK).

For United Continental, six of the 16 analysts gave a “strong buy” rating, three gave a “buy” rating, and seven gave a “hold” rating. The target price of $100.64 represents a 12.5% increase from the current price of $89.47.

Eight of the 17 analysts gave a “strong buy” recommendation, while nine analysts gave a “buy” recommendation on Delta Air Lines. Analysts’ target price of $68.00 represents a 21.3% increase from the current price of $56.05.

For American Airlines, six of the 16 analysts gave a “strong buy” rating, eight gave a “buy” rating, and two gave a “hold” rating. With a target price of $47.56, Wall Street analysts expect a 33.2% rise from the current market price of $35.72.

Alaska Air Group received “strong buy” recommendations from three of 14 analysts. Five analysts gave a “buy” rating, five gave a “hold” rating, and one gave a “sell” rating. The target price of $76.67 depicts Wall Street analysts’ forecast of a 20% increase from the current market price of $63.90.

Southwest Airlines accounts for ~4% of the First Trust Nasdaq Transportation ETF (FTXR).

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