JPMorgan downgraded Southwest (LUV) to Underweight from Neutral with an unchanged price target of $25. The stock’s “valuation premium can’t be ignored,” the analyst tells investors in a research note. The firm cites the combination of Southwest’s “surging valuation premium” and its desire to rebalance ratings following the addition of Sun Country for the downgrade. JPMorgan believes Southwest’s best margin and return on invested capital “days lie in the past.”
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