What Southwest Airlines Co. (LUV) Insiders Are Up To

Southwest Airlines Co. (NYSE:LUV) traded with a subtraction of -$0.8 to $53.67 on Wednesday, a downside of -1.48 percent. An average of 7,610,347 shares of common stock have been traded in the last five days. There was a gain of $0.82 in the past week. The last 20 days have seen an average of 7,125,066 shares traded, while the 50-day average volume stands at 6,768,699.

LUV stock has increased by 11.48% in the last month. The company shares reached their 1-month lowest point of $47.34 on 09/15/21. With the stock rallying to its 52-week high on 04/14/21, shares of the company touched a low of $37.48 and a high of $64.75 in 52 weeks. In spite of this, the price is down -17.12% from the 52-week high.

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Insider Transactions

205 days have passed since Southwest Airlines Co. (LUV) last reported insider trading activity. MONTFORD JOHN T, who is Director, most recently acquired $500 shares at $61.85 per share on Mar 15. In this transaction, the insider spent $30,925. EVP Corporate Services, Jordan Robert E, disposed of 28,795 shares at a price of $59.98 on Mar 08. The insider now owns more than $1,727,196 worth of shares. Prior to that, EVP, Daily Operations Wells Gregory D went on to Sale 15,909 shares at $57.46 each on Feb 25. An amount of $914,131 was transacted.

Valuation Metrics

Southwest Airlines Co. (LUV) has a trailing price-to-earnings (P/E) ratio of 18.35 for the broader industry and 28.11 for the sector. This means investors are optimistic about the stock’s future prospects. In the last five years, Southwest Airlines Co.’s PE ratio has ranged between 105.25 and 7.021. The stock’s beta is 1.20. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.09, the price-to-book (PB) ratio at 3.32, and the price-to-cash flow ratio at 48.10.

Financial Health

The quick ratio of Southwest Airlines Co. for the three months ended June 29 was 1.50, and the current ratio was 1.50, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.95 and a total debt to equity ratio of 1.17 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 66.20% against a 5-year average of 18.7%. Southwest Airlines Co.’s EBITDA margin for the year ending June 29 is -38.22%, while its operating margin for the same period stands at -18.10%. Its gross profit as reported stood at -$635.0 million compared to revenue of $9.05 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Southwest Airlines Co.’s return on assets was -4.50%, compared to 6.4% over the last five years. In the past year, the return on investment has been -13.70%, and the 5-year average is 13.2%. Meanwhile, the return on equity (ROE) for the past 12 months has been -17.10% and the 5-year average holds at 16.1%. For the broader industry, ROE averaged 13.58 over the past year.

Earnings Surprise

For the three-month period that ended June 29, Southwest Airlines Co. had $2.75 billion in cash. The analyst consensus anticipated Southwest Airlines Co.’s latest quarter earnings to come in at -$0.23 per share, but it turned out to be -$0.35, a -52.20% surprise. For the quarter, EBITDA amounted to $909.0 million. Shareholders own equity worth $591.64 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Southwest Airlines Co. (LUV) price momentum. RSI 9-day as of the close on 05 October was 58.39%, suggesting the stock is Neutral, with historical volatility in this time frame at 34.95%.

As of today, LUV’s price is $53.73 +1.56% or $0.82 from its 5-day moving average. LUV is currently trading +10.89% higher than its 20-day SMA and -14.35% lower than its 100-day SMA. However, the stock’s current price level is +4.32% above the SMA50 and +15.92% above the SMA200.

The stochastic %K and %D were 76.15% and 80.70%, respectively, and the average true range (ATR) was 1.60. With the 14-day stochastic at 64.68% and the average true range at 1.56, the RSI (14) stands at 58.25%. The stock has reached 0.96 on the 9-day MACD Oscillator while the 14-day reading was at 2.09.

Analyst Ratings

Barclays upgraded Southwest Airlines Co. (NYSE: LUV) to a an Overweight rating in its most recent analyst report. Previously, the stock was rated as a an Equal weight.The consensus rating for Southwest Airlines Co. (LUV) among analysts is Buy. According to current brokerage recommendations, 0 brokerage firms advise that investors sell LUV, while 2 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 3 analysts, while 17 others rate it as a “buy”.

What is LUV’s price target for the next 12 months?

Analysts predict a range of price targets between $55.00 and $76.00, with a median target of $65.00. Taking a look at these predictions, the average price target given by analysts for Southwest Airlines Co. (LUV) stock is $66.06.


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