A Look Ahead: Southwest Airlines's Earnings Forecast

Southwest Airlines LUV is gearing up to announce its quarterly earnings on Thursday, 2024-10-24. Here's a quick overview of what investors should know before the release.

Analysts are estimating that Southwest Airlines will report an earnings per share (EPS) of $-0.06.

The announcement from Southwest Airlines is eagerly anticipated, with investors seeking news of surpassing estimates and favorable guidance for the next quarter.

It's worth noting for new investors that guidance can be a key determinant of stock price movements.

Performance in Previous Earnings

During the last quarter, the company reported an EPS beat by $0.07, leading to a 3.03% drop in the share price on the subsequent day.

Here's a look at Southwest Airlines's past performance and the resulting price change:

Tracking Southwest Airlines's Stock Performance

Shares of Southwest Airlines were trading at $30.49 as of October 22. Over the last 52-week period, shares are up 30.76%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Analyst Observations about Southwest Airlines

For investors, staying informed about market sentiments and expectations in the industry is paramount. This analysis provides an exploration of the latest insights on Southwest Airlines.

Analysts have provided Southwest Airlines with 10 ratings, resulting in a consensus rating of Neutral. The average one-year price target stands at $29.07, suggesting a potential 4.66% downside.

Analyzing Analyst Ratings Among Peers

The below comparison of the analyst ratings and average 1-year price targets of United Airlines Holdings, LATAM Airlines Group and Alaska Air Gr, three prominent players in the industry, gives insights for their relative performance expectations and market positioning.

• As per analysts' assessments, United Airlines Holdings is favoring an Outperform trajectory, with an average 1-year price target of $84.11, suggesting a potential 175.86% upside.
• The consensus outlook from analysts is an Outperform trajectory for LATAM Airlines Group, with an average 1-year price target of $37.0, indicating a potential 21.35% upside.
• For Alaska Air Gr, analysts project an Buy trajectory, with an average 1-year price target of $51.43, indicating a potential 68.68% upside.

Overview of Peer Analysis

The peer analysis summary outlines pivotal metrics for United Airlines Holdings, LATAM Airlines Group and Alaska Air Gr, demonstrating their respective standings within the industry and offering valuable insights into their market positions and comparative performance.

Key Takeaway:

Southwest Airlines ranks in the middle for revenue growth among its peers. It has the lowest gross profit compared to others. The return on equity of Southwest Airlines is also lower than some of its peers. Overall, Southwest Airlines is positioned in the middle based on the key financial metrics analyzed.

Discovering Southwest Airlines: A Closer Look

Southwest Airlines is the largest domestic air carrier in the United States by passengers boarded. Southwest operates over 800 aircraft in an all-Boeing 737 fleet. Despite offering some longer routes and a few perks for business travelers, the airline predominantly specializes in short-haul, leisure flights operated in a single, open-seating cabin configuration in a point-to-point network. In 2025, Southwest will modify its cabins to offer some seats with extra legroom and will update its ticketing process to offer assigned seats.

Southwest Airlines: Delving into Financials

Market Capitalization: Positioned above industry average, the company's market capitalization underscores its superiority in size, indicative of a strong market presence.

Revenue Growth: Southwest Airlines's revenue growth over a period of 3 months has been noteworthy. As of 30 June, 2024, the company achieved a revenue growth rate of approximately 4.5%. This indicates a substantial increase in the company's top-line earnings. When compared to others in the Industrials sector, the company excelled with a growth rate higher than the average among peers.

Net Margin: Southwest Airlines's net margin is impressive, surpassing industry averages. With a net margin of 5.06%, the company demonstrates strong profitability and effective cost management.

Return on Equity (ROE): Southwest Airlines's ROE stands out, surpassing industry averages. With an impressive ROE of 3.6%, the company demonstrates effective use of equity capital and strong financial performance.

Return on Assets (ROA): Southwest Airlines's financial strength is reflected in its exceptional ROA, which exceeds industry averages. With a remarkable ROA of 1.04%, the company showcases efficient use of assets and strong financial health.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.87.

To track all earnings releases for Southwest Airlines visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.