Morgan Stanley analyst Ravi Shanker maintained a Buy rating on Southwest Airlines (LUV – Research Report) today and set a price target of $38.00.
Ravi Shanker has given his Buy rating due to a combination of factors influencing Southwest Airlines’ current and future performance. Despite a lower-than-expected second-quarter guidance, largely due to reduced revenue per available seat mile (RASM) assumptions, Shanker acknowledges the company’s strong internal initiatives that are helping it navigate the volatile macroeconomic environment. Management’s confidence in achieving their EBIT contribution targets for 2025 and 2026, even after adjusting overall EBIT targets, reflects a robust internal strategy.
Moreover, Southwest Airlines’ management has actively countered skepticism regarding the pace of their initiatives, emphasizing that there is no evidence of negative customer outcomes. The company’s solid balance sheet and substantial share buyback program position it as a potential standout performer in a challenging year. These elements combined suggest that Southwest Airlines may emerge as a strong investment opportunity, justifying Shanker’s Buy rating.
In another report released today, Seaport Global also maintained a Buy rating on the stock with a $33.00 price target.