Southwest shares gain for a fourth straight session on Thursday, Boeing 737 MAX removed from Southwest flight schedule until early June

Southwest Airlines Co (LUV), the largest 737 MAX operator in the United States, said on Thursday that it would cancel nearly 330 flights per day from its weekday schedule of over 4 000 flights through June 6th in an attempt to “reduce last-minute flight cancellations and unexpected disruptions.”

Southwest’s decision follows similar moves by competitors American Airlines and United Airlines.

Shares of Southwest Airlines closed higher for a fourth consecutive trading session in New York on Thursday. The stock went up 0.49% ($0.27) to $55.30, after touching an intraday high at $55.67, or a price level not seen since December 23rd ($56.09).

Shares of Southwest Airlines Company have risen 2.45% so far in 2020 compared with a 2.66% gain for the benchmark index, S&P 500 (SPX).

In 2019, Southwest Airlines Co’s stock went up 16.14%, thus, it again underperformed the S&P 500, which registered a 28.88% gain.

Boeing said earlier in January that it would recommend simulator training for pilots before the 737 MAX goes back in the air. Such a process, however, could further postpone the jet’s return to service and could add to the US plane maker’s costs.

In December, Southwest, which has an entirely Boeing 737 fleet, reached a compensation agreement with Boeing Co in relation with the 737 MAX global grounding.

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 $44.00. The median estimate represents an 8.50% upside compared to the closing price of $55.30 on January 16th.

The same media also reported that at least 15 out of 21 surveyed investment analysts had rated Southwest Airlines’ stock as “Hold”, while 4 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.