Southwest upgraded to Buy at Argus on increased travel demand

As previously reported, Argus upgraded Southwest (LUV) to Buy from Hold with a $35 price target The firm is citing the prospects for strong travel demand and the management’s ability to implement its growth initiatives, noting that in order to offset rising costs and maximize revenue growth, Southwest plans to increase its capacity by 1%-2% and fully utilize its existing fleet through 2027, the analyst tells investors in a research note. While unit costs moderate throughout the year and the company’s fleet becomes more fuel-efficient, earnings are likely to recover, Argus adds, also boosting its FY25 EPS view by 40c to $1.70.