Southwest assumed with a Neutral at UBS

UBS analyst Atul Maheswari assumed coverage of Southwest (LUV) with a Neutral rating with a price target of $43, up from $33. While Southwest is making several changes to position the airline based on evolving customer preferences such as adding extra leg room seat and segmenting the cabin, among others, which, coupled with initiatives such as bag fees, could drive improved financials, there is a risk of negative customer reaction to Southwest’s changes as well as execution risks associated with making several significant changes simultaneously, the analyst tells investors in a research note. The company will need to showcase potential for upside for the stock to move meaningfully higher from here, UBS argues.