BofA raised the firm’s price target on Southwest to $31 from $29 and keeps a Neutral rating on the shares. The firm expected Southwest to make progress on its cost structure as the focus shifts toward optimization and efficiency, but labor, maintenance costs, and operational investments continue as the the 2024 unit cost guidance of up 6%- 7% was “meaningfully higher” than the firm’s estimate and Visible Alpha consensus of around 2% cost growth despite accruing for labor deals for several quarters, the analyst tells investors. However, driven by better revenues, the firm is raising its 2024 EPS estimate to $1.79 from $1.54.
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