Southwest downgraded to Hold from Buy at Deutsche Bank

Deutsche Bank analyst Michael Linenberg downgraded Southwest Airlines to Hold from Buy with a price target of $29, down from $32. Despite reporting record revenues driven by record passenger volumes, Southwest continues to experience margin pressure as its revenue generation continues to lag its elevated cost structure, the analyst tells investors in a research note. While encouraged by Southwest’s plans to add assigned seats, a premium onboard product, and the launch of red-eye flights, the firm says these initiatives will take time to roll out and are not without execution risk. As such, it sees near-term earnings pressure.