Key Takeaways:
- Southwest Airlines (LUV, Financial) has paused its earnings guidance due to weakening demand.
- The company's Q2 unit revenue predictions disappointed investors, leading to a 4.5% drop in share price premarket.
- Wall Street analysts offer varied price targets, with potential upside if performance improves.
Southwest Airlines Halts Guidance Amid Weak Demand
Southwest Airlines (LUV) recently announced it would suspend issuing future earnings guidance due to a notable dip in demand, particularly affecting domestic leisure travel. The situation has caused the company to step back from reaffirming its earnings projections for 2025-2026. Falling short of expectations, the projected unit revenue for the second quarter has sparked investor concerns over potential market share erosion, resulting in a notable 4.5% decrease in the company’s stock price during premarket trading.
Wall Street Analysts Forecast
In the current market climate, 18 analysts have set a one-year price target for Southwest Airlines Co (LUV, Financial), with an average projection of $29.70. The highest expectation sits at $42.00, while the lowest hovers around $19.00. This indicates a potential upside of 16.39% from the latest trading price of $25.52. For more detailed projections, visit the Southwest Airlines Co (LUV) Forecast page.
Analyst Ratings and GF Value Estimates
The consensus among 23 brokerage firms currently places Southwest Airlines Co (LUV, Financial) at an average rating of 3.1, suggesting a "Hold" status. The brokerage recommendation scale ranges from 1, signifying a Strong Buy, to 5, which denotes a recommendation to Sell.
According to GuruFocus, the estimated GF Value for Southwest Airlines Co (LUV, Financial) is projected at $35.57 within the next year. This estimate suggests an impressive potential upside of 39.38% from the current stock price of $25.52. The GF Value is determined by analyzing historical trading multiples, past business growth, and future performance projections. Additional insights are available on the Southwest Airlines Co (LUV) Summary page.
