Shares of Southwest Airlines (LUV) lost 3.5% and closed at $51.29 on Thursday after the company reported a higher-than-expected loss for the second quarter of 2021. Texas-based Southwest is a low-cost passenger airline that services more than 115 locations in the U.S. and 10 other nations.
The company reported a net loss of $0.35 per share, higher than the Street’s estimates of a loss of $0.32 per share. (See Southwest stock chart on TipRanks)
Operating revenues totaled $4 billion, marginally surpassing analysts’ expectations of $3.88 billion. The figure is 297.6% higher year-over-year but reflects a 32.2% decline compared to the second quarter of 2019.
The CEO of Southwest Airlines, Gary C. Kelly, said, “We believe 2022 will be another transition year in the pandemic recovery, and our primary goals will be to deliver operational reliability with optimized resources; generate solid profits and margins; restore and grow the route network; and reduce carbon emissions intensity.”
On July 22, Raymond James analyst Savanthi Syth assigned a Buy rating to the stock with a price target of $68 (32.6% upside potential). The analyst expects the company to report earnings per share (EPS) of $0.20 in the third quarter.
Overall, the stock has a Strong Buy consensus based on 8 Buys and 1 Hold. The average Southwest Airlines price target of $73.29 implies nearly 43% upside potential. Shares have gained 56.4% over the past year.
According to TipRanks’ Smart Score rating system, Southwest Airlines scores an 8 out of 10, suggesting that the stock is likely to outperform market averages.
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