While the entire market is plunging thanks in part to lower fuel prices, one company who is welcoming the decline with open arms is Southwest Airlines Co (NYSE:LUV). In fact the entire airline industry, whose primary variable cost is fuel, should be welcoming the drastic decline in oil prices.
Today Southwest Airlines Co (NYSE:LUV) reported that they nearly tripled their quarter four profits due to a reduction in costs. The company, which is the fourth largest U.S. airline by traffic, said that their oil expenses plunged 37% in the last quarter alone from $2.62 a gallon to just $2.03. This has allowed them to report a profit of $536 million or $0.82 per share. Revenue for the company also rose in addition to their cost reduction, coming in at $4.98 billion on the quarter. Despite this good news, the company still fell shy of analyst estimates on both the top and bottom lines. Analysts had predicted an EPS of $0.90 on revenue of $5 billion.
The stock decreased 0.72% or $0.28 on January 21, hitting $39.31. Approximately 1,000 shares traded hands. LUV shares have risen 15.90% since June 16, 2015 and are currently uptrending. It has outperformed the S&P500 by 24.76%.
From a total of 6 analysts covering Southwest Airlines Co. (NYSE:LUV) stock, 3 rate it a “Buy”, 1 a “Sell”, and 2 a “Hold”. This means that 50% of the ratings are positive. The highest target price is $64 while the lowest target price is $41. The mean of all analyst targets is $51.20 which is 30.25% above today’s ($39.31) stock price. Southwest Airlines Co. was the topic of 13 analyst reports since July 30, 2015 according to the firm StockzIntelligence Inc. Morgan Stanley upgraded shares on January 7 to a “Equal-Weight” rating. Imperial Capital maintained LUV stock in a recent report from September 3 with a “Outperform” rating. Finally, Cowen & Co maintained the stock with a “Outperform” rating in a report they issued on a July 24.
The institutional sentiment is 0.91 in Q2 2015. It’s the same as in 2015Q2. The ratio is flat, as 84 funds sold all their Southwest Airlines Co shares they owned while 255 reduced their positions. only 94 funds bought stakes while 213 increased their total positions. Institutions now own 466.92 million shares which is 7.94% less than the previous share count of 507.19 million in 2015Q2.
Greenbrier Partners Capital Management Llc holds 14.22% of its total portfolio in Southwest Airlines Co, equating to 1.40 million shares. Egerton Capital (Uk) Llp owns 16.82 million shares representing 7.23% of their total US portfolio. Moreover, Amiya Capital Llp has 6.59% of their total portfolio invested in the company, equating to 24,800 shares. The New Jersey-based Credit Capital Investments Llc has a total of 6.45% of their portfolio invested in the stock. Provident Trust Co, a Wisconsin-based fund reported 2.92 million shares owned.
Since August 4, 2015, the stock had 0 buys, and 3 sales for a total of $3.92 million in net activity. Kelly Gary C sold 37,500 shares worth $1.51M. Romo Tammy sold 27,000 shares worth $1.02 million. Lamb Jeff sold 37,061 shares worth $1.39M.
Southwest Airlines Co. operates Southwest Airlines . The company has a market cap of $25.75 billion. Southwest is a passenger airline that provides scheduled air transportation in the United States and near-international markets. It has 14.42 P/E ratio. The Firm serves around 93 destinations in 40 states and runs international services to Montego Bay, Nassau, Oranjestad, Cabo San Lucas/Los Cabos, Cancun, Mexico City and Punta Cana.