Is Southwest airline a buy?
Solid Rank & VGM Score: Southwest Airlines currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank of 1 or 2, offer the best investment opportunities.
Southwest Airlines Co (NYSE:LUV)
The 16 analysts offering 12-month price forecasts for Southwest Airlines Co have a median target of 50.50, with a high estimate of 65.00 and a low estimate of 40.00. The median estimate represents a +37.49% increase from the last price of 36.73.
| High | $65.00 |
|---|---|
| Median | $50.00 |
| Low | $40.00 |
| Average | $51.35 |
| Current Price | $37.88 |
However, Southwest faces two threats to its profit growth: year-over-year revenue comparisons that are about to get a lot tougher, and looming labor cost inflation. These factors represent key risks that could hurt Southwest Airlines' stock performance in the near future.
Southwest Airlines Co Stock Forecast FAQ
Out of 13 analysts, 6 (46.15%) are recommending LUV as a Strong Buy, 1 (7.69%) are recommending LUV as a Buy, 5 (38.46%) are recommending LUV as a Hold, 0 (0%) are recommending LUV as a Sell, and 1 (7.69%) are recommending LUV as a Strong Sell.
Currently, Southwest Airlines carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
| High | $215.00 |
|---|---|
| Median | $172.00 |
| Low | $110.00 |
| Average | $168.75 |
| Current Price | $133.27 |
Southwest Airlines Co (NYSE: LUV) does not pay a dividend.
Southwest Airlines trades on a P/E ratio of 8.8, which is below the US market average of 12.7.
The 12 analysts offering 12-month price forecasts for Alaska Air Group Inc have a median target of 61.50, with a high estimate of 98.00 and a low estimate of 45.00. The median estimate represents a +33.43% increase from the last price of 46.09.
What are Southwest's weaknesses?
The biggest weakness of Southwest Airlines is its inability to remain competitive in the face of other airline companies adopting cost-cutting measures because of the pandemic. In addition to this, Southwest's destinations and passenger amenities are falling short of those its competitors offer.
Southwest Airlines is a perennial favorite for commitment-phobes. Known for its flexible ticket policy and two free checked bags for every passenger, Southwest doesn't charge the fees that come with flying on other airlines.
The stock fell 6.8% on Thursday, dragged down by the company's projection that inflation-related headwinds will persist in the third quarter.
Signals & Forecast
The Disney stock holds buy signals from both short and long-term moving averages giving a positive forecast for the stock. Also, there is a general buy signal from the relation between the two signals where the short-term average is above the long-term average.
Zacks' proprietary data indicates that Delta Air Lines, Inc. is currently rated as a Zacks Rank 3 and we are expecting an inline return from the DAL shares relative to the market in the next few months.
PEG ratios higher than 1.0 are generally considered unfavorable, suggesting a stock is overvalued. Conversely, ratios lower than 1.0 are considered better, indicating a stock is undervalued.
- Buy. Zacks' proprietary data indicates that The Kroger Co. is currently rated as a Zacks Rank 2 and we are expecting an above average return from the KR shares relative to the market in the next few months.
Cash flow per share is the after-tax earnings plus depreciation on a per-share basis that functions as a measure of a firm's financial strength. Many financial analysts place more emphasis on cash flow per share than on earnings per share (EPS).
The company has a fortress balance sheet that includes +$16.5B in liquidity, a net cash position of +$3.2B, and an investment-grade credit rating from all three ratings agencies. The improved liquidity increases the likelihood of the restoration of shareholder payouts in 2023 or 2024.
As Southwest has by far the strongest balance sheet in its peer group, it is the most resilient airline during the ongoing coronavirus crisis. Moreover, Southwest has begun to recover strongly from the pandemic.
Is Disney stock a buy hold or sell?
Signals & Forecast
The Disney stock holds buy signals from both short and long-term moving averages giving a positive forecast for the stock. Also, there is a general buy signal from the relation between the two signals where the short-term average is above the long-term average.
Apple Inc (NASDAQ:AAPL)
The 37 analysts offering 12-month price forecasts for Apple Inc have a median target of 185.00, with a high estimate of 220.00 and a low estimate of 136.00. The median estimate represents a +17.56% increase from the last price of 157.36.
