Southwest Airlines

The following is a summary of the Southwest Airlines Co. (LUV) Q1 2024 Earnings Call Transcript: Financial Performance: Southwest Airlines achieved record first quarter operating revenues and passengers, continuing their trend of eight consecutive quarters of growth. Despite setbacks from Boeing’s delivery delays, managed business revenues increased by 25% YoY. To manage potential cost increases, the company trimmed its 2024 capital spending forecast from $3.5 billion – $4 billion to $2.5 billion. For Q2 2024, Southwest projects a record revenue performance, marking it the ninth consecutive quarter of top line growth. Ancillary revenue rose by 18% YoY in Q1, outpacing the company’s passenger growth. Business Progress: Southwest opened 18 new cities during the pandemic and restored its network quickly after the 2022 demand surge. However, adjustments are being made to enhance profits, including network optimizations, underperforming market adjustments, revenue performance improvements through marketing and revenue management, and efficiency initiatives. Additional […]

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,

Barclays analyst Brandon Oglenski maintains Southwest Airlines (NYSE:LUV) with a Equal-Weight and lowers the price target from $32 to $30.

Jefferies analyst Sheila Kahyaoglu upgrades Southwest Airlines (NYSE:LUV) from Underperform to Hold and raises the price target from $20 to $28.

Shares of Southwest Airlines (LUV) tumbled nearly 15% on Tuesday after the carrier tempered its revenue expectations for the first quarter and said that Boeing (BA) delivery challenges will impact its 2024 capacity. Southwest now sees revenue per available seat mile coming in flat to up 2% in the first quarter, compared with a prior view of 2.5% to 4.5% growth, according to a filing with the Securities and Exchange Commission. Roughly one point of the guidance decrease is due to higher-than-expected “completion factors in February and March,” with the remainder reflecting lower close-in leisure passenger volume. With a 99.3% completion factor since Feb. 1, the airline now expects first-quarter capacity to be up 11% versus a prior view of 10%. “The company’s first quarter 2024 operational performance has been strong, thus far, and flight cancellations have been lower than was expected in late January, when first quarter 2024 capacity

Southwest Airlines is one of the most mentioned companies in the U.S. across all news items in the last 12 hours, according to Factiva data. Southwest is getting fewer aircrafts this year than it previously expected as issues at Boeing intensify. Southwest, which strictly uses Boeing aircraft, said in a filing with the Securities and Exchange Commission that Boeing told the airline to expect 46 deliveries of the 737-8 plane in 2024, less than the previously expected 79. “As a result of Boeing’s continued challenges, the company expects the delivery schedule to be fluid and, therefore, plans to reduce capacity and re-optimize schedules, primarily for the back half of 2024, which will likely result in at least a one point reduction to the company’s full year 2024 capacity plans on a year-over-year basis,” Southwest said. Dow Jones & Co. owns Factiva.

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

Southwest Airlines Updates Q1 Guidance: Sees RASM Flat To Up 2% (Prior Est. Up 2.5%-4.5%), Sees Economic Fuel Costs Per Gallon $2.95-$3.00 (Prior Est. $2.70-$2.80)

Bernstein Research analyst David Vernon upgraded Southwest Airlines Company (NYSE:LUV) from Underperform to Market Perform and raised the price target from $26 to $32 on Tuesday, citing a change in sentiment on domestic pricing. In a new note to clients, Vernon highlighted resiliency in travel demand and positive commentary from airline management teams during the recent earnings cycle which has led Bernstein to anticipate stronger development in the domestic market than it had previously forecasted. The Bernstein analyst pointed to a more moderate capacity forecast due to slowing deliveries from Boeing, equipment availability issues at Spirit and Frontier Airlines’ shift out of competitive markets. When combined with strong travel demand, Bernstein believes a positive revision to revenue forecasts is appropriate.

Southwest Airlines (LUV) said Monday that it is adding additional flights from Feb. 8 to Feb. 10 from Kansas City and San Francisco to Las Vegas in anticipation of the upcoming 58th iteration of the Super Bowl. Following the game’s outcome, Southwest plans to add more flights to facilitate the return of fans to their respective destinations on Feb. 12 and Feb. 13, the company said.

Barclays analyst Brandon Oglenski maintains Southwest Airlines (NYSE:LUV) with a Equal-Weight and raises the price target from $27 to $32.

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 $32, up $8, is 21x our ’25 EPS view (started at $1.53; ’24’s cut to $1.23 from $1.97), below LUV’s five-year historical average of 30x. We believe a discount is merited due to rising unit costs. Q4 EPS of $0.37 vs. a loss per share of $0.38, beat consensus by $0.24. Revenues grew 12% Y/Y while capacity rose by 21% Y/Y. LUV released its ’24 outlook, expecting its unit costs to rise 6%-7% on 6% capacity growth; however, we think unit costs could grow more than LUV expects, given the recent labor deal increasing its pilots’ pay by +50% over the next five years, while persistent delays in aircraft deliveries continue to keep maintenance costs elevated. In addition, LUV anticipates capex to be