Jefferies analyst Sheila Kahyaoglu maintained a Hold rating on Southwest Airlines (LUV – Research Report) yesterday and set a price target of $30.00.
Sheila Kahyaoglu’s rating is based on a combination of factors impacting Southwest Airlines’ financial outlook. The company has lowered its Revenue per Available Seat Mile (RASM) expectations for the first quarter due to a weakening macroeconomic environment, which includes reduced government travel and the effects of the California wildfires. Additionally, there is a noted decrease in demand trends, contributing to the more conservative revenue guidance.
Furthermore, while Southwest Airlines is implementing cost reduction initiatives and expects improved fuel efficiency, these measures are offset by the introduction of checked bag fees, which represents a shift from their previous policy. The company is also accelerating its share repurchase program, which could impact its financial flexibility. These mixed signals, along with the company’s current valuation, have led Sheila Kahyaoglu to maintain a Hold rating on the stock.
In another report released today, Bernstein also maintained a Hold rating on the stock with a $33.00 price target.