CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target of $30, cut $2, is 19.9x our ’25 EPS view (cut to $1.51 from $1.53; we cut ’24’s to $1.05 from $1.23), below LUV’s historical average, on persistent aircraft delivery delays. Shares are down ~15% today after LUV announced that it plans to trim its ’24 capacity outlook, while revising its Q1 24 guidance. LUV announced today that it expects to see around 42% fewer deliveries of Boeing’s (BA 184 **) 737 MAX aircraft in ’24 than it had initially expected (46 new aircraft deliveries vs. prior guidance of 79 aircraft), given the persistent regulatory scrutiny that BA has faced since a door panel blew off mid-flight on an Alaska Air Group (ALK 39 ***) operated flight in January, making it the second time that LUV has cut its delivery forecast this year, which is placing pressure on LUV to cut its ’24 capacity guidance (update to follow when Q1 earnings are released, per LUV). In addition, LUV announced it had raised its expected Q1 24 fuel costs to $2.95/g-$3.00/g (vs. the prior $2.70/g-$2.80/g).