Southwest Airlines Co (LUV) announced on Tuesday the order of 34 additional 737 MAX 7 aircraft from Boeing Co, which it will have delivered in 2022, as the US air carrier prepares for a vaccine-driven air travel demand recovery.
“Passenger demand and booking trends remain primarily leisure-oriented,” the air carrier said in a statement, cited by Reuters.
The move brings the company’s total orders for the 737 MAX 7 aircraft for 2022 to 234 jets.
Southwest Airlines also said that it now projected its average core cash burn to be within the range of $1 million to $2 million per day during the second quarter. Previously, it had forecast core cash burn within the range of $1 million to $3 million per day.
In May, the airline’s cash burn was approximately $2 million per day.
The shares of Southwest Airlines closed higher for the fourth time in the past ten trading sessions in New York on Tuesday. It has also been the sharpest single-session gain since May 26th. The stock went up 1.06% ($0.62) to $58.90, after touching an intraday high at $59.30, or a price level not seen since June 3rd ($60.30).
The shares of Southwest Airlines Company have risen 26.37% so far in 2021 compared with a 12.54% gain for the benchmark index, S&P 500 (SPX).
In 2020, Southwest Airlines Co’s stock went down 13.65%, thus, it underperformed the S&P 500, which registered a 16.26% gain.
Analyst stock price forecast and recommendation
According to TipRanks, at least 10 out of 13 surveyed investment analysts had rated Southwest Airlines Co’s stock as “Buy”, while 3 – as “Hold”. The median price target on the stock stands at $70.00.