Jesup & Lamont Maintains a 'Sell' on Southwest Airlines (LUV)

October 8, 2009 10:10 AM EDT

Jesup & Lamont maintains a 'Sell' rating on Southwest Airlines (NYSE: LUV)

Jesup analyst says, "Maintains a Sell although we acknowledge the shares could trade higher when the company reports third quarter EPS on Thursday, October 15. If this were to occur, we would be taking money off the table. Southwest Airlines reported September traffic grew by 8.8% on a decline in capacity of 7.8% so that load factor rose by 11.3 points to 74.7% from 63.4%. For the third quarter, traffic grew by 4.7% on a capacity decline of 5.8% so that load factor rose by 8.0 points to 79.6% from 71.6%. At the same time, Southwest reported that passenger unit revenue for the month of September was up by 3 points. This follows decreases of 5.5% in July and 6% in August, so that for the quarter, “PRASM” declined by 2.8%. We think this will be an industry leading performance when all of the airlines report results for the third quarter...For 2010, our preliminary estimate is for EPS of $0.42 per share, so that using a multiple of 10x to 12x estimated 2010 EPS, our price target should be between $4.20 and $5.00 per share."

To see more analyst ratings on LUV Click Here.

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