LUV stock: buy or sell?
Updated on:
September 20th, 2019
3
Southwest Airlines Co. operates a passenger airline that provides scheduled air transportation services in the United States and near-international markets.
Should I buy LUV stock?
Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. That's why is so important to choose your own trading strategy that matches with your character as inversor. At Stocks2.com, we use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best.None of our preferred buy setups matches with Southwest Airlines stock situation right now, hence this is not a suitable entry point.
| Buy setup | Elegible |
|---|---|
| New all-time high | No |
| New 52 week high | No |
| Price crossing up 200d MA | No |
| 100d MA crossing up 200d MA | No |
Is Southwest Airlines stock a buy?
Financial institutions and banks post stock ratings everyday.
At Stocks2.com, we gathered 15 ratings published for LUV stock in the last month.| Date | Analyst / Broker | Previous rating | Current rating |
| 2019-9-6 | Berenberg Bank | n/a | Hold |
| 2019-9-13 | Macquarie | Neutral | Outperform |
| 2019-8-16 | Wolfe Research | Market Perform | Outperform |
| 2019-8-14 | Morgan Stanley | n/a | Overweight |
| 2019-8-13 | Argus | Buy | Hold |
| 2019-7-26 | Cowen | Market Perform | Market Perform |
| 2019-7-26 | Cowen | n/a | Market Perform |
| 2019-5-20 | Morgan Stanley | n/a | Overweight |
| 2019-4-8 | Raymond James | Outperform | Market Perform |
| 2019-4-26 | Barclays | Equal Weight | Equal Weight |
| 2019-3-8 | Wolfe Research | Outperform | Peer Perform |
| 2019-3-28 | Imperial Capital | n/a | Inline |
| 2019-3-28 | Credit Suisse Group | Neutral | Neutral |
| 2019-3-28 | Credit Suisse Group | Neutral | Neutral |
| 2019-3-27 | Cowen | n/a | Market Perform |
LUV stock analysis
Daily outlook
Southwest Airlines decreased a disappointing -1.07% and closed at $54.49.
Southwest Airlines ended today at $54.49 and decreased a disappointing -1.07%. In the last 16 days when LUV stock price broke up the SMA200d line, it gained $3.11 (6.05%). From a daily perspective, LUV is in a short term uptrend after plotting its last bottom ($50.91, on Sep 3rd) higher than the previous bottom, and its last top ($56.49, on Sep/18) also over the previous top. Now trading in between its last bottom and last top LUV might consolidate in a plain range, waiting to break out over $56.49 or down under $50.91. Since SMA50d and SMA100d crossed up on September/9, LUV price climbed $2.35 per share (4.51%).
Weekly outlook
After boosting an exceptional 6.54% in a week last week, Southwest Airlines closed this week at $54.49 and slightly fell a fateful -2.33%. Late July LUV plunged a godawful -5.19% in just one week.
Price pattern shows an uptrend with two rising tops and bottoms, and now trading upwards to the $55.74 resistance. Since late August when LUV stock price broke up the SMA40w line, it gained $3.93 (7.77%).
LUV stock price history
LUV IPO was on January 2nd, 1980 at $0.12 per share1. Since then, LUV stock grew a 45,308.30%, with a yearly average of 1,161.80%. If you had invested $1,000 in LUV stock in 1980, it would worth $453,083.00 today.
1: Adjusted price after possible price splits or reverse-splits.
LUV stock historical price chart
LUV stock reached 52-week highs at $63.18, and all-time highs 2017-12-21 with a price of 65.59.
LUV stock price target is $56.20
Predicting the price evolution of a stock or any financial instrument in a reliable and repeatable way is probably impossible. However, many stock price predictions are published every day by banks, financial institutions and independent analysts. You should not follow the analysts' LUV stock price predictions in the hope that they will be met as they may be wrong and not met. We found 11 price forecasts for Southwest Airlines stock published in the last 30 days:| Date | Analyst / Broker | Action | Previous target | Current target | Diff |
| 2019-9-6 | Berenberg Bank | Initiates | n/a | $57.00 | - |
| 2019-8-16 | Wolfe Research | Upgrades | n/a | $57.00 | - |
| 2019-8-14 | Morgan Stanley | Lowers Target | $64.00 | $59.00 | -7.8% |
| 2019-7-26 | Cowen | Reiterates | $55.00 | $57.00 | 3.6% |
| 2019-7-26 | Cowen | Raises Target | $55.00 | $57.00 | 3.6% |
| 2019-5-20 | Morgan Stanley | Lowers Target | $68.00 | $64.00 | -5.9% |
| 2019-4-26 | Barclays | Lowers Target | $65.00 | $60.00 | -7.7% |
| 2019-3-28 | Imperial Capital | Lowers Target | $55.00 | $52.00 | -5.5% |
| 2019-3-28 | Credit Suisse Group | Reiterates | $56.00 | $50.00 | -10.7% |
| 2019-3-28 | Credit Suisse Group | Lowers Target | $56.00 | $50.00 | -10.7% |
| 2019-3-27 | Cowen | Lowers Target | $58.00 | $55.00 | -5.2% |
| (in average) | $59.10 | $56.20 | -5.0% |
Financials and fundamental analysis
Earnings date and Earnings per Share
Since April, when Southwest Airlines published its last earnings report, it . As soon as we get its actual EPS from the earnings report, we will update this review.| Quarter | Reporting date | Estimated EPS | Actual EPS | Surprise |
|---|---|---|---|---|
| 2017-Q2 | - | n/a | 1.23 | n/a |
| 2017-Q3 | 2017-10-26 | 0.87 | 0.88 | 1.1% |
| 2017-Q4 | 2018-01-25 | 0.77 | 0.77 | 0.0% |
| 2018-Q1 | 2018-04-26 | 0.75 | 0.75 | 0.0% |
| 2018-Q2 | 2018-07-26 | 1.25 | 1.26 | 0.8% |
| 2018-Q3 | 2018-10-25 | 1.06 | 1.08 | 1.9% |
| 2018-Q4 | 2019-01-24 | 1.06 | 1.17 | 10.4% |
| 2019-Q1 | 2019-04-25 | 0.89 | n/a | n/a |
| 2019-Q2 | - | n/a | n/a | n/a |
| 2019-Q3 | - | n/a | n/a | n/a |
Annual financial results
In 2018, Southwest Airlines annual revenues gained a decent 3.87% to $21,965.00 M USD from $21,146.00 marked in 2017. When comparing 2018 vs 2017, nevertheless, profit margin (that is, the net income divided by revenues) decreased a -4.65% to 11.22%. To have an up to date picture of the financial situation of Southwest Airlines, we have calculated the trailing twelve month (TTM) sales and income figures. TTM values are the sum of the last 4 quarters and aproximate to an annual fiscal report ending in 2019-Q1 that can be compared to 2018 fiscal year results. Annual Southwest Airlines TTM sales up to March 2019 were $22,170.00 and earnings were $2,389.00 million dollars. If we compare this TTM figures with the last reported annuality, we can esteem Southwest Airlines business evolution since December 2018: Annual turnover up to March, compared to lastest yearly report, remained stable a slightly fine 0.93%. In the same way, profit margin (net income/sales) stayed stable at 11.22%.| Year | Sales | YoY | Income/(margin) | YoY |
|---|---|---|---|---|
| 2013 | $17,700 M | - | $757 M4.3% | - |
| 2014 | $18,605 M | 5.11% | $1,136 M6.1% | 50.07% |
| 2015 | $19,820 M | 6.53% | $2,181 M11.0% | 91.99% |
| 2016 | $20,425 M | 3.05% | $2,244 M11.0% | 2.89% |
| 2017 | $21,146 M | 3.53% | $3,357 M15.9% | 49.60% |
| 2018 | $21,965 M | 3.87% | $2,465 M11.2% | -26.57% |
| TTM | $22,170 M | 0.93% | $2,389 M10.8% | -3.08% |
Quarterly financial results
Southwest Airlines reported $5,149.00 million in sales for 2019-Q1, a -9.73% decline compared to previous quarter. Reported quarter earnings marked $387.00 million with a profit margin of 7.52%. Profit margin depreciated a -3.95% compared to previous quarter when profit margin was 11.47%. When comparing turnover to same quarter last year, Southwest Airlines sales marked a fine increase and appreciated a 4.15%.| Quarter | Sales1 | QoQ2 | Income1/(margin) | QoQ2 |
|---|---|---|---|---|
| 2017-Q2 | $5,740 M | - | $746 M13.0% | - |
| 2017-Q3 | $5,270 M | -8.19% | $503 M9.5% | -32.57% |
| 2017-Q4 | $5,283 M | 0.25% | $1,878 M35.5% | 273.36% |
| 2018-Q1 | $4,944 M | -6.42% | $463 M9.4% | -75.35% |
| 2018-Q2 | $5,742 M | 16.14% | $733 M12.8% | 58.32% |
| 2018-Q3 | $5,575 M | -2.91% | $615 M11.0% | -16.10% |
| 2018-Q4 | $5,704 M | 2.31% | $654 M11.5% | 6.34% |
| 2019-Q1 | $5,149 M | -9.73% | $387 M7.5% | -40.83% |
Southwest Airlines ownership
When you are planning to invest in a company, it's worth to review its ownership structure.Management staff in all public traded companies that hold equity is required to report every transaction to the SEC. For Southwest Airlines, 0.29% of all outstanding shares are owned by its staff.
Bearish positions for LUV stock account 0.00%, no big difference from last month.
For a better context understanding, the next table shows ownership data compared to other related stocks:
| LUV | AAL | ALGT | ALK | DAL | |
|---|---|---|---|---|---|
| Market cap | $29.3 B | $12.6 B | $2.5 B | $8.0 B | $38.1 B |
| Total shares | 537.5 M | 445.3 M | 16.3 M | 123.3 M | 650.2 M |
| Float shares | 481.9 M | 396.1 M | 11.4 M | 122.8 M | 574.5 M |
| - Institutional holdings (%) | 81.9% | 7.8% | 81.5% | 89.7% | 0.0% |
| - Insider holdings (%) | 0.3% | 39.8% | 20.8% | 0.4% | 49.6% |
| Shares in short selling | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
LUV summary
| Friday, September 20th, 2019 | |
|---|---|
| Open | $55.16 |
| Close | $54.49 |
| Day range | $54.27 - $55.43 |
| Previous close | $55.08 |
| Session gain | -1.07% |
| Average true range | $1.25 |
| 50d mov avg | $52.03 |
| 100d mov avg | $51.58 |
| 200d mov avg | $51.60 |
| Daily pattern | lt06a |
| Weekly pattern | lb02a |
Southwest Airlines performance
Performance as an absolute value is never valid if it's not benchmarked against competitors or related stocks in the industry. We compared Southwest Airlines against American Airlines, Allegiant Travel, Alaska Air, Delta Air Lines, Hawaiian, JetBlue Airways, Spirit Airlines, SkyWest and United Continental in the following table:| Stock | 3m | 6m | 12m |
|---|---|---|---|
| LUVSouthwest Airline... | 6.70% | 11.29% | -13.41% |
| AALAmerican Airlines | -10.04% | -6.85% | -34.32% |
| ALGTAllegiant Travel | 12.08% | 24.57% | 19.26% |
| ALKAlaska Air | 5.31% | 21.20% | -5.23% |
| DALDelta Air Lines | 5.41% | 19.31% | 0.93% |
| HAHawaiian | 4.93% | 10.59% | -32.06% |
| JBLUJetBlue Airways | -8.98% | 6.21% | -14.93% |
| SAVESpirit Airlines | -20.34% | -28.31% | -21.25% |
| SKYWSkyWest | 2.42% | 15.28% | 1.49% |
| UALUnited Continenta... | 2.73% | 11.88% | -0.95% |
Southwest Airlines competitors
We selected a few stocks to conform a list of Southwest Airlines competitors to examine if you are interested in investing in LUV:- American Airlines (AAL)
- Allegiant Travel (ALGT)
- Alaska Air (ALK)
- Delta Air Lines (DAL)
- Hawaiian (HA)
- JetBlue Airways (JBLU)
- Spirit Airlines (SAVE)
- SkyWest (SKYW)
- United Continental (UAL)
Latest LUV stock news
- InvestorPlace3 Big Stock Charts for Friday: Southwest Airlines, Juniper Networks and BorgWarnerJuly 26, 2019
- Seeking AlphaSouthwest Airlines Is Way Too CheapJuly 24, 2019
- Seeking AlphaSouthwest Airlines: Resilient, Despite The ChallengesJuly 8, 2019
- Seeking AlphaBest Of Breed: Southwest Airlines Is A Strong BuyMay 28, 2019
- Seeking AlphaTime To Show LUV Some Love? - Consider Southwest Airlines Before It Takes OffApril 15, 2019