Argus upgrades Southwest to Buy on better earnings from slower capacity growth

As previously reported, Argus upgraded Southwest to Buy from Hold with a $40 price target. The company’s outlook has improved over the past several months as Southwest and other airlines have opted to limit capacity growth following a post-pandemic spike, the analyst tells investors in a research note. The firm adds that it expects less rapid capacity growth in 2024 to benefit Southwest’s revenue per available seat mile, resulting in better-than-expected earnings. Argus also raises its 2024 EPS view to $2.40 from $2.00 and its 2025 view to $2.80 from $2.50.