Southwest Airlines Shares Decline for Eighth Consecutive Session
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 51 minutes ago
0mins
Should l Buy LUV?
Source: seekingalpha
- Stock Price Decline: Southwest Airlines (LUV) shares fell 0.45% on Monday to close at $38.33, marking the eighth consecutive day of declines and a total loss exceeding 7%, indicating market concerns about its future performance.
- Fuel Cost Pressure: Disruptions in the Strait of Hormuz have led to increased fuel expenses and profit margin pressures for airlines, with Brent crude hovering near $110 per barrel and U.S. West Texas Intermediate crude around $103, exacerbating profitability challenges across the sector.
- Dismal Profit Forecast: In April, Southwest forecasted a bleak second-quarter profit outlook, with CEO Bob Jordan warning that higher jet fuel prices could create a headwind of approximately $1 billion for the airline, reflecting the severe conditions facing the industry.
- Market Analyst Insights: Analyst Joseph Parrish noted that with LUV shares near $38, they are back in the middle range, but he believes that the potential downside risks have not yet fully materialized, suggesting that the stock would be more attractive below a market cap of about $15 billion, equivalent to roughly $29 per share after recent buybacks.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy LUV?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on LUV
Wall Street analysts forecast LUV stock price to rise
14 Analyst Rating
4 Buy
9 Hold
1 Sell
Hold
Current: 38.500
Low
34.00
Averages
44.21
High
60.00
Current: 38.500
Low
34.00
Averages
44.21
High
60.00
About LUV
Southwest Airlines Co. (Southwest) operates Southwest Airlines, a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Company's fare products include four categories: Wanna Get Away, Wanna Get Away Plus, Anytime, and Business Select to provide customers options when choosing a fare. It also offers ancillary services, such as EarlyBird Check-In, Upgraded Boarding, and transportation of pets and unaccompanied minors, in accordance with Southwest’s respective policies. Its Rapid Rewards loyalty program enables program members to earn points for every dollar spent on Southwest base fares, also including purchases paid with LUV Vouchers, gift cards, or flight credit, with no portion of the purchase price paid with Rapid Rewards points. It operates over 803 Boeing 737 aircraft in its fleet and serves 117 destinations in 42 states, the District of Columbia, the Commonwealth of Puerto Rico, and ten near-international countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Southwest Airlines Shares Decline for Eighth Consecutive Session
- Stock Price Decline: Southwest Airlines (LUV) shares fell 0.45% on Monday to close at $38.33, marking the eighth consecutive day of declines and a total loss exceeding 7%, indicating market concerns about its future performance.
- Fuel Cost Pressure: Disruptions in the Strait of Hormuz have led to increased fuel expenses and profit margin pressures for airlines, with Brent crude hovering near $110 per barrel and U.S. West Texas Intermediate crude around $103, exacerbating profitability challenges across the sector.
- Dismal Profit Forecast: In April, Southwest forecasted a bleak second-quarter profit outlook, with CEO Bob Jordan warning that higher jet fuel prices could create a headwind of approximately $1 billion for the airline, reflecting the severe conditions facing the industry.
- Market Analyst Insights: Analyst Joseph Parrish noted that with LUV shares near $38, they are back in the middle range, but he believes that the potential downside risks have not yet fully materialized, suggesting that the stock would be more attractive below a market cap of about $15 billion, equivalent to roughly $29 per share after recent buybacks.
See More
Berkshire Hathaway's Portfolio Revamp Triggers Stock Market Fluctuations
- Portfolio Restructuring: Under new CEO Greg Abel, Berkshire Hathaway's latest quarterly filing reveals a purchase of 39.8 million shares in Delta Airlines valued at $2.6 billion, making it the company's 14th largest holding, indicating a renewed confidence in the airline sector.
- Tech Stock Increase: Alphabet, Google's parent company, saw an increase of 58 million shares, up 224%, becoming Berkshire's seventh largest holding, despite a 0.6% drop in early trading, reflecting the market's mixed sentiment towards tech stocks.
- New Investments and Reductions: Berkshire initiated a new stake in Macy's while reducing its Chevron holdings by 35%, selling $8 billion worth of shares, with Macy's stock rising 5% in premarket trading, indicating optimism in retail stocks.
- Complete Exit from Amazon: Berkshire fully exited its investment in Amazon by selling 2.3 million shares in Q1, marking an adaptation to changing consumer behaviors post-pandemic, with Amazon's stock down 0.7% in early trading.
See More
Buffett Reinvests in Delta Airlines After Six Years
- Buffett's Return to Airlines: Under new CEO Greg Abel, Berkshire Hathaway's first 13F filing reveals a $2.65 billion investment in Delta Airlines, making it the 14th largest holding with a 6.1% stake, indicating a renewed confidence in the airline sector.
- Delta's Revenue Growth: In Q1 2026, Delta's adjusted operating revenue reached a record $14.2 billion, up 9.4% year-over-year, with high-margin premium products and loyalty revenue growing by 14% and 13% respectively, showcasing the company's successful transformation into a brand with significant value.
- Fuel Cost Challenges: Despite facing a doubling of fuel prices due to Middle East conflicts, leading to over $2 billion in additional costs expected in Q2, Delta is responding by trimming capacity and raising fares to recover 40% to 50% of the increased costs.
- Long-Term Growth Potential: Delta's management projects adjusted earnings per share for 2026 to be between $6.50 and $7.50, implying about 20% growth at the midpoint, with the current stock price around $72 trading at approximately 10 times earnings, presenting a favorable investment opportunity.
See More
Berkshire Hathaway's Major Portfolio Overhaul Under Greg Abel
- Portfolio Restructuring: Under Greg Abel's leadership, Berkshire Hathaway's equity portfolio underwent significant changes in the first three months, adding Delta Air Lines and Macy's, indicating a renewed focus on the airline and retail sectors.
- Massive Alphabet Stake Increase: Berkshire increased its stake in Google's parent company Alphabet by 224% in Q1, making it the company's seventh-largest holding with a market value of $16.6 billion, and the stock has rallied 38% since, showcasing the success of this decision.
- Reduction in Holdings: Abel dramatically cut the number of companies in the portfolio, selling off major stakes including Amazon and Visa, with Amazon's shares reduced from 10 million to 2.3 million, reflecting a significant strategic shift in investment focus.
- Return to Delta Airlines: Berkshire purchased 39.8 million shares of Delta Air Lines in Q1, currently valued at $2.8 billion, marking the company's first return to airline stocks since 2020, demonstrating confidence in the recovery of the airline industry.
See More
Berkshire Hathaway Reenters Airline Sector with Delta Stake
- Delta Stake Acquisition: Berkshire Hathaway has acquired a stake in Delta Air Lines worth over $2.6 billion, making it the company's 14th largest holding, marking a return to the airline sector after exiting during the pandemic, indicating confidence in the industry's recovery.
- Portfolio Rebalancing: In the first quarter, Berkshire trimmed its stake in Chevron while significantly increasing its investment in Alphabet, now the seventh largest holding, reflecting a strategic shift towards technology stocks.
- Stock Sales: The conglomerate sold several stocks last quarter, including Mastercard and Visa, likely to unwind positions tied to departed investment manager Todd Combs, showcasing a strategic adjustment following management changes.
- Increased Cash Reserves: Buffett acknowledged the current investment environment is not ideal, with Berkshire's cash reserves nearing $400 billion, indicating challenges in finding suitable investment opportunities.
See More
Berkshire Hathaway Reenters Airline Sector with Delta Stake
- Return to Airlines: Berkshire Hathaway has acquired a stake worth over $2.6 billion in Delta Air Lines, marking its return to the airline industry after exiting entirely during the pandemic in 2020, which reflects confidence in the recovery of the aviation market.
- Portfolio Adjustments: In the first quarter, Berkshire trimmed its stake in Chevron while significantly increasing its investment in Alphabet, now its seventh-largest holding, indicating a strategic shift towards technology stocks.
- Impact of Executive Changes: Following the departure of investment manager Todd Combs, Berkshire sold several stocks last quarter, including a complete exit from Amazon, highlighting the necessity of adjusting investment strategies in response to leadership changes.
- Cash Reserve Challenges: Buffett acknowledged the current investment environment is not ideal, with Berkshire's cash reserves nearing $400 billion; nevertheless, the company resumed stock buybacks in the first quarter, signaling a search for suitable investment opportunities.
See More
Southwest Airlines Shares Decline for Eighth Consecutive Session
- Stock Price Decline: Southwest Airlines (LUV) shares fell 0.45% on Monday to close at $38.33, marking the eighth consecutive day of declines and a total loss exceeding 7%, indicating market concerns about its future performance.
- Fuel Cost Pressure: Disruptions in the Strait of Hormuz have led to increased fuel expenses and profit margin pressures for airlines, with Brent crude hovering near $110 per barrel and U.S. West Texas Intermediate crude around $103, exacerbating profitability challenges across the sector.
- Dismal Profit Forecast: In April, Southwest forecasted a bleak second-quarter profit outlook, with CEO Bob Jordan warning that higher jet fuel prices could create a headwind of approximately $1 billion for the airline, reflecting the severe conditions facing the industry.
- Market Analyst Insights: Analyst Joseph Parrish noted that with LUV shares near $38, they are back in the middle range, but he believes that the potential downside risks have not yet fully materialized, suggesting that the stock would be more attractive below a market cap of about $15 billion, equivalent to roughly $29 per share after recent buybacks.
See More
Berkshire Hathaway's Portfolio Revamp Triggers Stock Market Fluctuations
- Portfolio Restructuring: Under new CEO Greg Abel, Berkshire Hathaway's latest quarterly filing reveals a purchase of 39.8 million shares in Delta Airlines valued at $2.6 billion, making it the company's 14th largest holding, indicating a renewed confidence in the airline sector.
- Tech Stock Increase: Alphabet, Google's parent company, saw an increase of 58 million shares, up 224%, becoming Berkshire's seventh largest holding, despite a 0.6% drop in early trading, reflecting the market's mixed sentiment towards tech stocks.
- New Investments and Reductions: Berkshire initiated a new stake in Macy's while reducing its Chevron holdings by 35%, selling $8 billion worth of shares, with Macy's stock rising 5% in premarket trading, indicating optimism in retail stocks.
- Complete Exit from Amazon: Berkshire fully exited its investment in Amazon by selling 2.3 million shares in Q1, marking an adaptation to changing consumer behaviors post-pandemic, with Amazon's stock down 0.7% in early trading.
See More
Buffett Reinvests in Delta Airlines After Six Years
- Buffett's Return to Airlines: Under new CEO Greg Abel, Berkshire Hathaway's first 13F filing reveals a $2.65 billion investment in Delta Airlines, making it the 14th largest holding with a 6.1% stake, indicating a renewed confidence in the airline sector.
- Delta's Revenue Growth: In Q1 2026, Delta's adjusted operating revenue reached a record $14.2 billion, up 9.4% year-over-year, with high-margin premium products and loyalty revenue growing by 14% and 13% respectively, showcasing the company's successful transformation into a brand with significant value.
- Fuel Cost Challenges: Despite facing a doubling of fuel prices due to Middle East conflicts, leading to over $2 billion in additional costs expected in Q2, Delta is responding by trimming capacity and raising fares to recover 40% to 50% of the increased costs.
- Long-Term Growth Potential: Delta's management projects adjusted earnings per share for 2026 to be between $6.50 and $7.50, implying about 20% growth at the midpoint, with the current stock price around $72 trading at approximately 10 times earnings, presenting a favorable investment opportunity.
See More
Berkshire Hathaway's Major Portfolio Overhaul Under Greg Abel
- Portfolio Restructuring: Under Greg Abel's leadership, Berkshire Hathaway's equity portfolio underwent significant changes in the first three months, adding Delta Air Lines and Macy's, indicating a renewed focus on the airline and retail sectors.
- Massive Alphabet Stake Increase: Berkshire increased its stake in Google's parent company Alphabet by 224% in Q1, making it the company's seventh-largest holding with a market value of $16.6 billion, and the stock has rallied 38% since, showcasing the success of this decision.
- Reduction in Holdings: Abel dramatically cut the number of companies in the portfolio, selling off major stakes including Amazon and Visa, with Amazon's shares reduced from 10 million to 2.3 million, reflecting a significant strategic shift in investment focus.
- Return to Delta Airlines: Berkshire purchased 39.8 million shares of Delta Air Lines in Q1, currently valued at $2.8 billion, marking the company's first return to airline stocks since 2020, demonstrating confidence in the recovery of the airline industry.
See More
Berkshire Hathaway Reenters Airline Sector with Delta Stake
- Delta Stake Acquisition: Berkshire Hathaway has acquired a stake in Delta Air Lines worth over $2.6 billion, making it the company's 14th largest holding, marking a return to the airline sector after exiting during the pandemic, indicating confidence in the industry's recovery.
- Portfolio Rebalancing: In the first quarter, Berkshire trimmed its stake in Chevron while significantly increasing its investment in Alphabet, now the seventh largest holding, reflecting a strategic shift towards technology stocks.
- Stock Sales: The conglomerate sold several stocks last quarter, including Mastercard and Visa, likely to unwind positions tied to departed investment manager Todd Combs, showcasing a strategic adjustment following management changes.
- Increased Cash Reserves: Buffett acknowledged the current investment environment is not ideal, with Berkshire's cash reserves nearing $400 billion, indicating challenges in finding suitable investment opportunities.
See More
Berkshire Hathaway Reenters Airline Sector with Delta Stake
- Return to Airlines: Berkshire Hathaway has acquired a stake worth over $2.6 billion in Delta Air Lines, marking its return to the airline industry after exiting entirely during the pandemic in 2020, which reflects confidence in the recovery of the aviation market.
- Portfolio Adjustments: In the first quarter, Berkshire trimmed its stake in Chevron while significantly increasing its investment in Alphabet, now its seventh-largest holding, indicating a strategic shift towards technology stocks.
- Impact of Executive Changes: Following the departure of investment manager Todd Combs, Berkshire sold several stocks last quarter, including a complete exit from Amazon, highlighting the necessity of adjusting investment strategies in response to leadership changes.
- Cash Reserve Challenges: Buffett acknowledged the current investment environment is not ideal, with Berkshire's cash reserves nearing $400 billion; nevertheless, the company resumed stock buybacks in the first quarter, signaling a search for suitable investment opportunities.
See More
