What’s Next for Southwest Airlines Co After Today’s Bullish Options Activity?

 What's Next for Southwest Airlines Co After Today's Bullish Options Activity?

In today’s session Southwest Airlines Co (LUV) registered an unusually high (455) contracts volume of call trades. Someone, most probably a professional was a very active buyer of the January, 2017 call, expecting serious LUV increase. With 455 contracts traded and 28914 open interest for the Jan, 17 contract, it seems this is a quite bullish bet. The option with symbol: LUV170120C00050000 closed last at: $1.05 or 10.5% up. About 2.31M shares traded hands. Southwest Airlines Co (NYSE:LUV) has declined 1.32% since April 21, 2016 and is downtrending. It has underperformed by 6.65% the S&P500.

Analysts await Southwest Airlines Co (NYSE:LUV) to report earnings on January, 19. They expect $0.66 EPS, down 26.67% or $0.24 from last year’s $0.9 per share. LUV’s profit will be $404.09 million for 17.73 P/E if the $0.66 EPS becomes a reality. After $0.93 actual EPS reported by Southwest Airlines Co for the previous quarter, Wall Street now forecasts -29.03% negative EPS growth.

Southwest Airlines Co (NYSE:LUV) Ratings Coverage

Out of 12 analysts covering Southwest Airlines Co. (NYSE:LUV), 9 rate it a “Buy”, 0 “Sell”, while 3 “Hold”. This means 75% are positive. Southwest Airlines Co. has been the topic of 28 analyst reports since July 30, 2015 according to StockzIntelligence Inc. Deutsche Bank maintained the shares of LUV in a report on Friday, October 23 with “Buy” rating. The firm has “Buy” rating by Deutsche Bank given on Friday, July 24. As per Thursday, October 27, the company rating was upgraded by JP Morgan. The firm earned “Equal-Weight” rating on Friday, April 15 by Barclays Capital. As per Friday, July 22, the company rating was downgraded by Buckingham Research. The stock of Southwest Airlines Co (NYSE:LUV) earned “Outperform” rating by Credit Suisse on Friday, January 22. The stock of Southwest Airlines Co (NYSE:LUV) has “Outperform” rating given on Friday, June 24 by Cowen & Co. The stock of Southwest Airlines Co (NYSE:LUV) earned “Outperform” rating by Credit Suisse on Tuesday, April 12. The firm has “Overweight” rating given on Thursday, February 4 by JP Morgan. The rating was maintained by Cowen & Co on Friday, July 22 with “Outperform”.

According to Zacks Investment Research, “Southwest Airlines is a major domestic airline that provides primarily shorthaul, high-frequency, point-to-point, low-fare service. Southwest operates over Boeing 737 aircraft in numerous cities. Southwest has the lowest operating cost structure in the domestic airline industry and consistently offers the lowest and simplest fares. Southwest also has one of the best overall Customer Service records.”

Insitutional Activity: The institutional sentiment increased to 0.9 in 2016 Q2. Its up 0.01, from 0.89 in 2016Q1. The ratio is positive, as 75 funds sold all Southwest Airlines Co shares owned while 260 reduced positions. 66 funds bought stakes while 233 increased positions. They now own 471.95 million shares or 5.42% less from 499.00 million shares in 2016Q1.
Parallax Volatility Advisers L P has 0.01% invested in the company for 105,430 shares. Tillar has 0.91% invested in the company for 23,452 shares. Ncm Cap Advisers last reported 11,983 shares in the company. Tompkins Fincl, a New York-based fund reported 5,805 shares. Kcg Holdg owns 57,930 shares or 0.05% of their US portfolio. The Ohio-based Fifth Third Bancshares has invested 0% in Southwest Airlines Co (NYSE:LUV). Robeco Institutional Asset Mngmt Bv, a Netherlands-based fund reported 86,685 shares. Shell Asset last reported 0.01% of its portfolio in the stock. Wealthfront Incorporated last reported 0.01% of its portfolio in the stock. Mitsubishi Ufj & Banking has 321,461 shares for 0.03% of their US portfolio. Horrell Cap Management, a Arkansas-based fund reported 10,000 shares. Cambridge Advisors last reported 8,210 shares in the company. The Virginia-based Thompson Siegel And Walmsley Ltd Llc has invested 0% in Southwest Airlines Co (NYSE:LUV). Fort Washington Advsrs Oh reported 37,323 shares or 0.03% of all its holdings. Tctc Llc holds 18,192 shares or 0.05% of its portfolio.

Insider Transactions: Since May 26, 2016, the stock had 3 insider buys, and 2 sales for $1.24 million net activity. $52,404 worth of Southwest Airlines Co (NYSE:LUV) was sold by MONTFORD JOHN T on Tuesday, June 7. KELLY GARY C bought 28,106 shares worth $1.00 million. On Wednesday, August 3 Van de Ven Michael G bought $150,247 worth of the stock or 4,200 shares. Shaw Mark R sold $66,820 worth of stock. CUNNINGHAM WILLIAM H DR bought $204,046 worth of stock or 5,700 shares. Lamb Jeff also sold $784,250 worth of Southwest Airlines Co (NYSE:LUV) on Thursday, May 26.

Southwest Airlines Co. operates Southwest Airlines. The company has a market cap of $28.66 billion. Southwest is a passenger airline that provides scheduled air transportation in the United States and near-international markets. It has a 13.3 P/E ratio. The Firm serves approximately 100 destinations in over 40 states, such as the District of Columbia, the Commonwealth of Puerto Rico, and approximately seven near-international countries, including Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, and Belize.

LUV Company Profile

Southwest Airlines Co. (Southwest), incorporated on March 9, 1967, operates Southwest Airlines. Southwest is a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Firm serves approximately 100 destinations in over 40 states, such as the District of Columbia, the Commonwealth of Puerto Rico, and approximately seven near-international countries, including Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, and Belize. The Firm added its first three destinations in Central America (San Jose, Costa Rica, Belize City, Belize, and Liberia, Costa Rica) and also commenced Southwest service to a fourth destination in Mexico (Puerto Vallarta). Southwest operates a total of approximately 704 Boeing 737 aircraft. The Firm also added approximately 20 domestic nonstop destinations from Dallas Love Field. Southwest offers a total of 180 weekday departures to over 50 nonstop destinations from Dallas Love Field. In addition, the Company added over eight international nonstop destinations from a newly constructed five-gate international terminal at Houston’s William P. Hobby Airport.

More notable recent Southwest Airlines Co (NYSE:LUV) news were published by: Prnewswire.com which released: “Southwest Airlines Appearance Technicians Ratify Tentative Agreement With Company” on November 22, 2016, also Bloomberg.com with their article: “Southwest Tumbles on Bleak Outlook” published on October 26, 2016, Prnewswire.com published: “Southwest Airlines Reports October Traffic” on November 07, 2016. More interesting news about Southwest Airlines Co (NYSE:LUV) were released by: Usatoday.com and their article: “Former Southwest Airlines employee named as shooter in Okla. airport murder” published on November 16, 2016 as well as Prnewswire.com‘s news article titled: “Southwest Airlines Flight Attendants Approve Tentative Agreement” with publication date: October 31, 2016.

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