Analyst Andrew Didora of Bank of America Securities maintained a Sell rating on Southwest Airlines (LUV – Research Report), retaining the price target of $31.00.
Andrew Didora has given his Sell rating due to a combination of factors related to Southwest Airlines’ financial outlook and strategic initiatives. Despite recent efforts to provide clarity on cost savings and revenue initiatives, there remains uncertainty about the full impact of these measures. The company has announced significant cost-saving plans, including layoffs and procurement initiatives, which are expected to yield substantial savings. However, these cost initiatives are seen as low-hanging fruit and may not provide long-term value.
Additionally, Southwest’s revenue strategies, such as bag fees and changes to the loyalty program, are still in early stages with limited details available. While these initiatives are projected to generate incremental revenue, their success is uncertain, especially given the mixed customer response to bag fees. The current stable environment follows a challenging period, but with macroeconomic uncertainties and the ambitious nature of Southwest’s revenue plans, Didora maintains a cautious outlook, reflected in his Underperform rating.
In another report released on March 17, J.P. Morgan also maintained a Sell rating on the stock with a $30.00 price target.