Bernstein analyst David Vernon has maintained their neutral stance on LUV stock, giving a Hold rating yesterday.
David Vernon has given his Hold rating due to a combination of factors impacting Southwest Airlines. The company reported a better-than-expected first-quarter performance, but the guidance for the second quarter appears weaker than anticipated, with earnings per share projected to be below market expectations. This discrepancy suggests potential challenges in meeting broader financial targets.
Moreover, while Southwest is implementing several profit improvement initiatives, the full-year guidance has been withdrawn, indicating uncertainty in achieving desired outcomes. The airline’s recent policy changes, such as introducing basic economy and bag fees, have not yet shown a negative impact on bookings, but there remains a risk of consumer pushback as these changes are rolled out. Additionally, the market is already cautious about domestic demand, which could further pressure the company’s performance. These factors collectively contribute to the Hold rating, reflecting a cautious stance amid ongoing transitions and market conditions.
In another report released yesterday, TD Cowen also maintained a Hold rating on the stock with a $21.00 price target.
LUV’s price has also changed slightly for the past six months – from $29.020 to $26.460, which is a -8.82% drop .