Southwest Airlines (LUV) Gains But Lags Market: What You Should Know

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In the latest trading session, Southwest Airlines (LUV) closed at $33.10, marking a +0.88% move from the previous day. This change lagged the S&P 500’s 2.37% gain on the day. Elsewhere, the Dow gained 2.47%, while the tech-heavy Nasdaq lost 0.07%.

Heading into today, shares of the airline had lost 0.58% over the past month, outpacing the Transportation sector’s loss of 6.82% and the S&P 500’s loss of 4.82% in that time.

Investors will be hoping for strength from Southwest Airlines as it approaches its next earnings release, which is expected to be October 27, 2022. In that report, analysts expect Southwest Airlines to post earnings of $0.41 per share. This would mark year-over-year growth of 278.26%. Our most recent consensus estimate is calling for quarterly revenue of $6.23 billion, up 33.13% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.10 per share and revenue of $24.09 billion. These totals would mark changes of +197.67% and +52.54%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Southwest Airlines. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.87% higher. Southwest Airlines is currently a Zacks Rank #3 (Hold).

Digging into valuation, Southwest Airlines currently has a Forward P/E ratio of 15.6. This represents a premium compared to its industry’s average Forward P/E of 12.65.

Also, we should mention that LUV has a PEG ratio of 2.6. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. LUV’s industry had an average PEG ratio of 1.73 as of yesterday’s close.

The Transportation – Airline industry is part of the Transportation sector. This group has a Zacks Industry Rank of 136, putting it in the bottom 47% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on

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