Southwest Airlines Sees Unusually Large Options Volume (NYSE:LUV)

Southwest Airlines Co. (NYSE:LUV) was the recipient of some unusual options trading on Thursday. Stock traders bought 39,081 call options on the company. This represents an increase of 43% compared to the typical daily volume of 27,266 call options.

Institutional Investors Weigh In On Southwest Airlines

A number of institutional investors and hedge funds have recently modified their holdings of LUV. Capital World Investors increased its holdings in Southwest Airlines by 21.4% during the 4th quarter. Capital World Investors now owns 53,475,988 shares of the airline’s stock valued at $1,544,387,000 after acquiring an additional 9,444,279 shares in the last quarter. Vanguard Group Inc. increased its stake in shares of Southwest Airlines by 3.3% during the 1st quarter. Vanguard Group Inc. now owns 67,569,773 shares of the airline’s stock worth $1,972,362,000 after purchasing an additional 2,148,435 shares in the last quarter. Healthcare of Ontario Pension Plan Trust Fund acquired a new position in shares of Southwest Airlines during the 2nd quarter worth approximately $48,551,000. Canada Pension Plan Investment Board lifted its stake in Southwest Airlines by 629.5% in the 2nd quarter. Canada Pension Plan Investment Board now owns 1,590,298 shares of the airline’s stock valued at $45,498,000 after buying an additional 1,372,305 shares in the last quarter. Finally, Dimensional Fund Advisors LP lifted its stake in Southwest Airlines by 21.6% in the 2nd quarter. Dimensional Fund Advisors LP now owns 5,828,166 shares of the airline’s stock valued at $166,742,000 after buying an additional 1,034,496 shares in the last quarter. Institutional investors and hedge funds own 80.82% of the company’s stock.

Southwest Airlines Stock Performance

LUV traded up $2.94 during trading on Thursday, hitting $31.33. The stock had a trading volume of 11,985,492 shares, compared to its average volume of 9,495,725. Southwest Airlines has a twelve month low of $21.91 and a twelve month high of $35.18. The firm has a market capitalization of $18.77 billion, a P/E ratio of 49.54, a PEG ratio of 26.92 and a beta of 1.16. The company has a debt-to-equity ratio of 0.48, a quick ratio of 0.85 and a current ratio of 0.90. The company’s 50-day moving average price is $27.56 and its 200 day moving average price is $27.88.

Southwest Airlines (NYSE:LUV) last posted its quarterly earnings results on Thursday, July 25th. The airline reported $0.58 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.51 by $0.07. The firm had revenue of $7.40 billion during the quarter, compared to analysts’ expectations of $7.32 billion. Southwest Airlines had a net margin of 0.41% and a return on equity of 5.92%. The firm’s revenue for the quarter was up 5.2% on a year-over-year basis. During the same period in the prior year, the company posted $1.09 earnings per share. On average, equities research analysts forecast that Southwest Airlines will post 0.24 EPS for the current fiscal year.

Southwest Airlines Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Wednesday, September 25th. Stockholders of record on Wednesday, September 4th were given a dividend of $0.18 per share. The ex-dividend date was Wednesday, September 4th. This represents a $0.72 dividend on an annualized basis and a dividend yield of 2.30%. Southwest Airlines’s payout ratio is 114.29%.

Analysts Set New Price Targets

LUV has been the subject of a number of research analyst reports. TD Cowen lowered their price target on Southwest Airlines from $26.00 to $19.00 and set a “hold” rating for the company in a report on Wednesday, July 17th. Citigroup dropped their price target on shares of Southwest Airlines from $29.00 to $28.25 and set a “neutral” rating for the company in a research report on Monday, July 29th. Melius reissued a “sell” rating and issued a $26.00 price target on shares of Southwest Airlines in a research note on Monday, June 10th. BNP Paribas raised shares of Southwest Airlines to a “strong sell” rating in a research report on Thursday, September 19th. Finally, Deutsche Bank Aktiengesellschaft restated a “hold” rating and set a $29.00 price target (down from $32.00) on shares of Southwest Airlines in a research note on Friday, July 26th. Four investment analysts have rated the stock with a sell rating, nine have issued a hold rating and four have assigned a buy rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and a consensus target price of $28.38.

About Southwest Airlines

Southwest Airlines Co operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.