CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We cut our 12-month target by $2 to $28, 24.3x our 2025 EPS view of $1.15 (from $1.51; 2024’s to $0.79 from $1.05), below LUV’s historical average. We think a discount is merited due to ongoing issues with Boeing (BA 164 **), causing further delays in new aircraft deliveries (LUV expects 20 aircraft deliveries in 2024 vs. prior guide of 46), which could cause unit costs to rise, in our view. Q1 LPS of -$0.36 vs. LPS of -$0.27 missed consensus by $0.02. Revenues grew 11% Y/Y on 11% capacity growth. LUV revised its 2024 guide, with capacity now expected to grow by 4% (vs. prior 6%) due to delays in aircraft deliveries. LUV noted today that it plans to end operations at four airports (Hancock Int’l, Bellingham Int’l, George Bush Intercontinental, and Cozumel Int’l), while reducing flights at O’Hare and Hartsfield-Jackson airports to cut costs and improve profitability. Should delays in aircraft deliveries persist, we would be unsurprised if LUV reduces additional flights to alleviate rising cost pressures.