Bearish Southwest Airlines Analyst Says This Company Decision Is 'A Step In The Right Direction'
Portfolio Pulse from Priya Nigam
Bernstein analyst David Vernon downgraded Southwest Airlines Co (NYSE:LUV) from Market Perform to Underperform, but raised the price target from $77 to $90. He anticipates that the company's full year 2023 earnings will be around half of the expected $3+ per share and views 2024 as a transitional year with several headwinds. Challenges include a new pilot contract, cost headwinds, fleet constraints, and shifts in demand. Management's decision to lower capacity in 2024 is seen as positive, but it will take time to optimize the network. LUV shares rose slightly to $29.15.
January 08, 2024 | 3:29 pm
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Bernstein downgraded Southwest Airlines to Underperform, despite raising the price target to $90, due to anticipated earnings challenges and operational headwinds.
The downgrade to Underperform suggests that the analyst sees more downside risk than upside potential in the short term, despite the increase in price target. The mixed signals may lead to short-term uncertainty and potential negative impact on the stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100