TD Cowen downgrades Southwest, says 2024 numbers need to drop

TD Cowen analyst Helane Becker downgraded Southwest to Market Perform from Outperform with a price target of $20, down from $26. The airline reported adjusted Q3 profit and revenue that was below consensus estimates, the analyst tells investors in a research note. Southwest is focused on improving results and to that end will reduce capacity growth, says the firm. TD notes that while the company has a relatively easy Q4 year-over-year compare, investor pushback includes balance sheet destruction, overcapacity, high costs and lower yields. It reduced its 2024 earnings per share estimate to 54c, well below the consensus of $2.18, and expects the consensus to come down.