Analysts Cautious on Southwest (LUV) as Cabin Retrofit Costs Remain High
Imperial Capital maintained an In-Line rating on Southwest (NYSE: LUV) and raised its price target to $9.00 (from $8.00).
Yesterday, Southwest reported adjusted EPS that was in line with consensus. While revenue missed estimates, analyst at Imperial Capital were encouraged by LUV’s disclosed that October unit revenue (PRASM) was running up 4 percent year-over-year.
"To us [this] indicates that September's PRASM weakness was driven by unusual one-time items more than underlying demand weakness," stated an analyst.
Going forward, analysts said they expect costs to remain "somewhat elevated" for the next few quarters as Southwest finishes retrofitting its cabin with slimmer seats.
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 $8.98 yesterday, with a 52 week range of $7.37-$10.05.
Yesterday, Southwest reported adjusted EPS that was in line with consensus. While revenue missed estimates, analyst at Imperial Capital were encouraged by LUV’s disclosed that October unit revenue (PRASM) was running up 4 percent year-over-year.
"To us [this] indicates that September's PRASM weakness was driven by unusual one-time items more than underlying demand weakness," stated an analyst.
Going forward, analysts said they expect costs to remain "somewhat elevated" for the next few quarters as Southwest finishes retrofitting its cabin with slimmer seats.
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 $8.98 yesterday, with a 52 week range of $7.37-$10.05.