#1 - Southwest Airlines (NYSE:LUV)
The first on our list of travel stocks to buy is Southwest Airlines (NYSE:LUV). According to the research firm Kastle Systems, air traffic is now at about 80% of pre-pandemic levels. That wasn’t the case a year ago. Yet in mid-April of 2021, LUV stock had managed to push past its pre-pandemic stock price. Then the Delta and Omicron variants on top of logistic issues stemming from vaccine mandates pushed the stock below $40. However, the stock looks to have found a base of support.
A selling point for Southwest throughout the pandemic is that the airline does not rely on international travel. Plus, it’s less reliant on business travel which it still appears will take some time to recover.
Southwest’s financials appear to be in good shape although the company did suspend its dividend during the pandemic. However, at this point, it’s the forward guidance that investors care about more than anything. And right now, the company is projecting earnings and revenue to grow significantly over the next five years. If that’s the case any concern about the company’s high forward price/earnings ratio will be alleviated.
About Southwest Airlines
Southwest Airlines Co operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.
Read More - Current Price
- $33.28
- Consensus Rating
- Reduce
- Ratings Breakdown
- 3 Buy Ratings, 11 Hold Ratings, 4 Sell Ratings.
- Consensus Price Target
- $31.37 (5.7% Downside)
