The market realizes what good product/business model SWA is. SWA is working to bring the customer back & particularly the business flyer. It will happen, the analyst below believes so also.
chase
Blaylock & Partners Initiates Coverage Of Southwest Airlines With a 'Hold' Rating
Tuesday August 27, 4:45 pm ET
NEW YORK, Aug. 27 /PRNewswire/ -- Blaylock & Partners' airlines and transportation analyst Ray Neidl has initiated coverage of Southwest Airlines Co. (NYSE: LUV - News) with a "hold" recommendation, but will raise his recommendation upon signs of economic recovery, an industry upturn or a pullback on the stock.
Mr. Neidl believes that Southwest Airlines should be a core holding for portfolio managers, as the company has proven that it can maintain profitability and growth. In his report titled "The Growing Giant," Mr. Neidl states that Southwest's quarterly earnings have consistently remained positive and the company continues to pay out dividends, supporting his belief that Southwest is the top airline in the industry. The analyst also writes that the company is capable of financing rapid growth through strong cash flow generation, and has by far the most solid balance sheet in the industry.Despite the volatile economic state and the precariousness of the airline industry after Sept. 11, Southwest continues to grow at about 5 percent -- half its normal rate of 10 percent plus annually -- and is recovering faster than its competitors. Mr. Neidl notes that the company should return to double-digit growth in 2003 and achieve annual EPS of $0.80 to $1, up from his current $0.67 estimate.
Other key reasons for Mr. Neidl's recommendation include the fact that Southwest has a unique product, offering a simple model of frequent, one class, cheap air service; has one of the highest daily aircraft utilization rates in the industry; has a simple fleet, which simplifies operations and keep costs low; and has management who understands that simplicity of product, low cost, and friendly service help maintain the company's competitive advantage.
In terms of risks, Mr. Neidl foresees Southwest facing the usual industry risks, which include the state of the economy, fuel prices and labor disruptions. He also notes that Southwest may face additional competition from other growing low-cost airlines and network carriers as they reduce costs.
Blaylock's ratings system consists of "buy," "hold" and "sell" recommendations. Investment banking stocks have a "not rated" designation.
Institutional investors interested in receiving more information should contact Mr. Neidl at 212-715-6627 ([email protected]). Journalists interested in receiving copies of the research reports should contact Dao Tran at [email protected].
chase
Blaylock & Partners Initiates Coverage Of Southwest Airlines With a 'Hold' Rating
Tuesday August 27, 4:45 pm ET
NEW YORK, Aug. 27 /PRNewswire/ -- Blaylock & Partners' airlines and transportation analyst Ray Neidl has initiated coverage of Southwest Airlines Co. (NYSE: LUV - News) with a "hold" recommendation, but will raise his recommendation upon signs of economic recovery, an industry upturn or a pullback on the stock.
Mr. Neidl believes that Southwest Airlines should be a core holding for portfolio managers, as the company has proven that it can maintain profitability and growth. In his report titled "The Growing Giant," Mr. Neidl states that Southwest's quarterly earnings have consistently remained positive and the company continues to pay out dividends, supporting his belief that Southwest is the top airline in the industry. The analyst also writes that the company is capable of financing rapid growth through strong cash flow generation, and has by far the most solid balance sheet in the industry.Despite the volatile economic state and the precariousness of the airline industry after Sept. 11, Southwest continues to grow at about 5 percent -- half its normal rate of 10 percent plus annually -- and is recovering faster than its competitors. Mr. Neidl notes that the company should return to double-digit growth in 2003 and achieve annual EPS of $0.80 to $1, up from his current $0.67 estimate.
Other key reasons for Mr. Neidl's recommendation include the fact that Southwest has a unique product, offering a simple model of frequent, one class, cheap air service; has one of the highest daily aircraft utilization rates in the industry; has a simple fleet, which simplifies operations and keep costs low; and has management who understands that simplicity of product, low cost, and friendly service help maintain the company's competitive advantage.
In terms of risks, Mr. Neidl foresees Southwest facing the usual industry risks, which include the state of the economy, fuel prices and labor disruptions. He also notes that Southwest may face additional competition from other growing low-cost airlines and network carriers as they reduce costs.
Blaylock's ratings system consists of "buy," "hold" and "sell" recommendations. Investment banking stocks have a "not rated" designation.
Institutional investors interested in receiving more information should contact Mr. Neidl at 212-715-6627 ([email protected]). Journalists interested in receiving copies of the research reports should contact Dao Tran at [email protected].