Southwest shares close lower on Tuesday, Boeing 737 MAX removed from Southwest flight schedule until mid-April

Southwest Airlines Co (LUV), the largest 737 MAX operator in the United States, said on Tuesday that it would cancel nearly 300 flights per day from its weekday schedule of nearly 4 000 flights through April 13th, as the MAX global grounding continues.

Southwest’s decision follows a similar move by rival American Airlines, which has removed the 737 MAX from its flight schedule through April 7th. Therefore, the grounded jet will probably not return to service for the busy spring break and Easter periods.

Shares of Southwest Airlines closed lower for the seventh time in the past ten trading sessions in New York on Tuesday. The stock went down 0.31% ($0.17) to $54.18, after touching an intraday low at $54.03, or a price level not seen since December 11th ($53.81).

Shares of Southwest Airlines Company have risen 16.57% so far in 2019 compared with a 27.35% gain for the benchmark index, S&P 500 (SPX).

In 2018, Southwest Airlines Co’s stock went down 28.98%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.

Boeing Co said on Monday that it intended to suspend production of its best-selling jet, the 737 MAX, in January. It is Boeing’s largest assembly-line halt in over two decades. A spokesperson for Southwest Airlines explained the recent decision over flight cancellations was not connected with Boeing’s announcement.

Last week the US Federal Aviation Administration said its review of the grounded jet would probably not be completed by the end of this year, as Boeing Co had anticipated.

Analyst stock price forecast and recommendation

According to CNN Money, the 18 analysts, offering 12-month forecasts regarding Southwest Airlines’ stock price, have a median target of $60.00, with a high estimate of $68.00 and a low estimate of $48.00. The median estimate represents a 10.74% upside compared to the closing price of $54.18 on December 17th.

The same media also reported that at least 13 out of 21 surveyed investment analysts had rated Southwest Airlines’ stock as “Hold”, while 6 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.