Analysts Have Mixed Opinions after LUV’s Downbeat Q1 Guidance



Mixed opinions

Analysts have mixed views about Southwest Airlines (LUV) stock after the company lowered the unit revenue outlook for the first quarter on March 27. Some analysts believe that Southwest Airlines’ downbeat first-quarter outlook wasn’t worse than what they had expected earlier.

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George Ferguson of Bloomberg Intelligence said, “There’s a little bit of relief that it wasn’t worse.” He added, “The market, after the beating the airlines have taken, says it isn’t terrible, and maybe we’re getting some of the bad news out and are ready for better news.”

Currently, analysts polled by Reuters have provided Southwest Airlines a consensus ~2.32 rating and a consensus “buy” recommendation. Approximately 50% of the analysts covering the stock have a bullish rating.

Of the 22 analysts, six have a “strong buy” recommendation, five have a “buy” recommendation, nine have a “hold” stance, while the remaining two analysts have a “sell” rating. Analysts’ average target price of $59.06 represents a 14.2% increase from $51.71.

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Peers’ rating

It seems analysts are bullish on the entire airline industry (IYT), as they have a “buy” recommendation one the majority of players in the space. Delta Air Lines (DAL), United Airlines (UAL), American Airlines (AAL), and Spirit Airlines (SAVE) have bullish recommendations, and analysts’ target prices on these stocks imply strong double-digit returns in the next year.

The one-year target prices for Delta Air Lines, United Airlines, American Airlines, and Spirit Airlines signify potential upsides of 14.9%, 18.8%, 29.3%, and 30.2%, respectively, from their current prices.


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