See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Southwest Airlines Co. (LUV) - free report >>
Landstar System, Inc. (LSTR) - free report >>
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Southwest Airlines Co. (LUV) - free report >>
Landstar System, Inc. (LSTR) - free report >>
Image: Bigstock
Here's Why You Should Discard Southwest Airlines (LUV) Now
Southwest Airlines Co. ‘s (LUV - Free Report) shares have declined 14.7% in the past six months compared with a 14.2% fall of the industry it belongs to.
Image Source: Zacks Investment Research
Coronavirus-led low air-travel demand has resulted in Southwest Airlines incurring a loss for six successive quarters. Adding to its woes, the spread of the Delta variant is likely to dampen the September-quarter results. Management now expects third-quarter 2021 operating revenues to plunge in the 18-20% range from third-quarter 2019 actuals (former view was a 15-20% decline). Operating revenues for October are also expected to decline between 20% and 30%.
Rising fuel prices hurt the airline’s bottom-line results. Fuel cost per gallon (inclusive of fuel tax: economic) rose 44.4% year over year to $1.92 in the second quarter. The airline anticipates economic fuel costs per gallon in the range of $2.05-$2.15 in both the third and the fourth quarters of 2021.
The company’s current year bottom-line results have widened from a loss of $1.23 per share to a loss of $1.87 in the past 60 days. Moreover, Southwest Airlines, currently carrying a Zacks Rank# 4 (Sell), has a Momentum Score of F. This reflects on the stock’s short-term unattractiveness. In view of the above-mentioned headwinds, we believe that investors should get rid of the stock from their respective portfolios. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Some better-ranked stocks in the broader Zacks Transportation sector are Schneider National, Inc. (SNDR - Free Report) , Landstar System, Inc. (LSTR - Free Report) and TFI International Inc. (TFII - Free Report) . All the stocks carry a Zacks Rank #2 (Buy).
Long-term expected earnings per share (three to five years) growth rate for Schneider National, Landstar and TFI International is pegged at 17.9%, 12% and 31.6%, respectively.