UPDATE: Bank of America Downgrades Southwest Airlines to Neutral

Bank of America lowers its rating on Southwest Airlines LUV to Neutral from Buy and lowers its price target to $9 from $13 on weaker projected available revenue per seat-mile (PRASM). Bank of America notes, "We expect revenue available per seat-mile (RASM gains) at LUV ...to lag sector through spring. We are reducing our 1Q12E to -$0.02 from +0.01 (Street $0.04) and our FY12E to to $0.60 from $0.65 (Street $0.80). ...Since mid-2011, LUV's PRASM has underperformed the domestic sector by 3pts. Full fare mix has deteriorated, and we wonder whether LUV's price-leader image has been tarnished by its unusually large number of fare hikes. In fact, higher fares seem to have spurred Spirit to enter LUV's Denver and Las Vegas markets." LUV closed at $8.48 a share on Friday.