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Southwest shares close lower on Thursday, third-quarter loss narrows due to robust travel demand

Southwest Airlines Co’s (LUV) third-quarter loss, reported on Thursday, narrowed from a year earlier as vaccination progress underpinned demand for air travel ahead of the busy holiday season.

The air carrier’s total operating revenue rose 161% year-on-year to $4.68 billion during the third quarter.

Excluding special items, Southwest Airlines reported a net loss of $135 million ($0.23 per share) during the quarter ended September 30th, compared with a loss of $1.17 billion ($1.99 per share) a year ago.

“Despite the deceleration of traffic in August and September due to surging COVID-19 cases, the third quarter 2021 demand and revenue performance was quite strong,” Southwest Chief Executive Officer Gary Kelly was quoted as saying by Reuters.

The shares of Southwest Airlines closed lower for the seventh time in the past ten trading sessions in New York on Thursday. It has also been the steepest single-session loss since October 15th. The stock went down 1.64% ($0.81) to $48.66, after touching an intraday low at $48.42. The latter has been a price level not seen since September 20th ($47.92).

The shares of Southwest Airlines Company have risen 4.42% so far in 2021 compared with a 21.13% gain for the benchmark index, S&P 500 (SPX).

In 2020, Southwest Airlines Co’s stock went down 13.65%, thus, it again underperformed the S&P 500, which registered a 16.26% gain.

Analyst stock price forecast and recommendation

According to TipRanks, at least 16 out of 17 surveyed investment analysts had rated Southwest Airlines Co’s stock as “Buy”, while 1 – as “Hold”. The median price target on the stock stands at $66.38.

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