southwest Airlines (LUV) closed the most recent trading day at $41.03, moving +0.91% from the previous trading session. This change outpaced the S&P 500’s 0.43% loss on the day. At the same time, the Dow lost 0.34%, and the tech-heavy Nasdaq lost 0.62%.
Prior to today’s trading, shares of the airline had lost 13.53% over the past month. This has lagged the Transportation sector’s loss of 5.38% and the S&P 500’s loss of 6.57% in that time.
Wall Street will be looking for positivity from Southwest Airlines as it approaches its next earnings report date. This is expected to be April 28, 2022. In that report, analysts expect Southwest Airlines to post earnings of -$0.61 per share. This would mark year-over-year growth of 64.53%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.52 billion, up 120.22% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.15 per share and revenue of $21.47 billion. These totals would mark changes of +153.49% and +35.95%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Southwest Airlines. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.15% higher within the past month. Southwest Airlines currently has a Zacks Rank of #4 (Sell).
Looking at its valuation, Southwest Airlines is holding a Forward P/E ratio of 35.49. Its industry sports an average Forward P/E of 33.51, so we one might conclude that Southwest Airlines is trading at a premium comparatively.
Investors should also note that LUV has a PEG ratio of 5.91 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Transportation – Airline was holding an average PEG ratio of 5.91 at yesterday’s closing price.
The Transportation – Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 242, which puts it in the bottom 5% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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