Southwest Airlines (LUV) Stock Slides as Market Rises: Facts to Know Before You Trade

The latest trading session saw Southwest Airlines (LUV) ending at $29.19, denoting a -0.27% adjustment from its last day's close. The stock trailed the S&P 500, which registered a daily gain of 0.11%. Elsewhere, the Dow saw an upswing of 0.12%, while the tech-heavy Nasdaq depreciated by 0.12%.

Shares of the airline witnessed a loss of 15.09% over the previous month, trailing the performance of the Transportation sector with its gain of 1.53% and the S&P 500's gain of 3.55%.

The investment community will be paying close attention to the earnings performance of Southwest Airlines in its upcoming release. The company is slated to reveal its earnings on April 25, 2024. The company's earnings per share (EPS) are projected to be -$0.27, reflecting no change from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $6.47 billion, indicating a 13.38% upward movement from the same quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.65 per share and a revenue of $28.63 billion, indicating changes of +5.1% and +9.72%, respectively, from the former year.

Investors should also note any recent changes to analyst estimates for Southwest Airlines. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 10.4% lower. Southwest Airlines currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Southwest Airlines is holding a Forward P/E ratio of 17.72. Its industry sports an average Forward P/E of 8.86, so one might conclude that Southwest Airlines is trading at a premium comparatively.

We can also see that LUV currently has a PEG ratio of 0.97. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Transportation - Airline industry currently had an average PEG ratio of 0.79 as of yesterday's close.

The Transportation - Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 23% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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