Imperial Capital Downgrades Southwest (LUV) to In-Line

Imperial Capital downgraded Southwest (NYSE: LUV) from Outperform to In-Line with a price target of $54.00 (from $68.00).

Ananlyst Mike Derchin comments "We are lowering our rating on LUV shares to In-Line from Outperform, and lowering our one-year price target to $54 from $68, about 6% above the recent share price. We are lowering our FY18 EPS estimate to $4.35 from $4.40, and lowering our FY19 EPS estimate to $5.10 from $5.60. Our FY18 estimate now assumes jet fuel averages $2.22 per gallon vs. $2.20 previously. Our FY19 estimate assumes capacity increases 5.5% vs. 5% previously, RASM increases 1% vs. 2% previously, CASM ex-fuel declines 0.5% vs. flat previously, and jet fuel averages $2.30 per gallon vs. $2.25 previously. Our price target now assumes shares trade 7.0x FY19 TEV/EBITDAR vs. 8.25x previously due to lower unit revenue growth potential."

For an analyst ratings summary and ratings history on Southwest click here. For more ratings news on Southwest click here.

Shares of Southwest closed at $51.08 yesterday.

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