Analyst Duane Pfennigwerth from Evercore ISI maintained a Buy rating on Southwest Airlines (LUV – Research Report) and keeping the price target at $40.00.
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Duane Pfennigwerth has given his Buy rating due to a combination of factors influencing Southwest Airlines’ recent performance and future outlook. Despite reporting a loss per share in the first quarter of 2025, Southwest’s results surpassed expectations due to lower non-fuel costs and higher unit revenue. The airline’s domestic revenue per available seat mile (RASM) showed growth, outperforming network carriers even without premium offerings, indicating strong operational efficiency.
Additionally, Southwest’s financial position remains robust with a net cash balance and significant free cash flow, which supports its ongoing share repurchase program. The company’s strategic initiatives and adjustments to capacity in response to demand trends are expected to contribute positively to future earnings. These factors, combined with a stable fleet management strategy, underpin the optimistic outlook reflected in the Buy rating and the target price of $40.00.
Based on the recent corporate insider activity of 63 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of LUV in relation to earlier this year.