Nucor earnings beat by $0.08, revenue fell short of estimates
Investing.com - Raymond (NSE:RYMD) James raised its price target on Southwest Airlines (NYSE:LUV) to $42.00 from $40.00 on Friday, while maintaining an Outperform rating on the airline stock. The new target represents significant upside from the current price of $33.04, though InvestingPro data shows the stock has fallen nearly 9% in the past week. Analyst targets for LUV currently range from $19 to $46, reflecting mixed sentiment in the market.
The firm cited Southwest’s ongoing initiatives as driving improvement even without a full-fledged demand recovery in the airline industry. Raymond James noted that Southwest’s commentary on demand inflection and timing of benefits aligns with industry peers. As a prominent player in the Passenger Airlines industry, Southwest maintains strong fundamentals with InvestingPro analysis indicating more cash than debt on its balance sheet.
The research firm acknowledged Southwest missed third-quarter expectations, which emphasizes the back-end-loaded nature of the company’s 2025 earnings profile. The analyst report also highlighted execution risk following issues with the airline’s Basic Economy rollout, though noted these problems were resolved quickly.
Raymond James pointed out that Southwest’s guidance implies a steeper year-over-year revenue acceleration into the fourth quarter compared to competitors, but stated this aligns with the company’s more substantial initiatives.
The firm also mentioned Southwest could potentially benefit from another Spirit bankruptcy or industry consolidation due to greater route overlap, a factor that supports the maintained Outperform rating despite temporary setbacks.
In other recent news, Southwest Airlines reported second-quarter earnings that did not meet analyst expectations. The company announced a net income of $213 million, or $0.39 per diluted share, which was below the anticipated $0.51 per share. Revenue for the quarter was $7.24 billion, slightly under the consensus estimate of $7.29 billion and representing a 1.5% decrease compared to the same quarter last year. Additionally, Southwest Airlines’ adjusted earnings per share, excluding special items, were $0.43, which also missed analyst projections. These developments come as investors assess the impact of these earnings results on the company’s financial outlook.
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