WEST PALM BEACH, FL—Elliott Investment Management L.P., a prominent investment firm, has reported the sale of 1,203,920 shares of Southwest Airlines Co. (NYSE:LUV) common stock. The shares were sold on October 28, 2024, at an average price of $29.83, generating a total of approximately $35.9 million.
Following this transaction, Elliott Investment Management holds 59,912,580 shares of Southwest Airlines. The sale was executed at prices ranging from $29.46 to $30.22 per share. The firm, led by Paul E. Singer, remains a significant stakeholder in the airline, with the shares held indirectly through its affiliated funds.
In addition to the stock sale, Elliott Investment Management also reported an increase in its position in notional principal amount derivative agreements, structured as cash-settled swaps. These derivative agreements, which mimic the economic outcomes of stock ownership without conferring voting rights, have strike prices within the same range as the stock sale.
Elliott Investment Management has committed to returning any statutory profits from these transactions to Southwest Airlines, in accordance with Section 16(b) of the Securities Exchange Act of 1934.
In other recent news, Southwest Airlines has been the focus of various financial analyses and strategic developments. Citi has maintained a Neutral rating on Southwest Airlines with a steady price target of $31.50, adjusting its earnings per share (EPS) estimates for the airline based on recent financial results and anticipated changes in revenue and costs. Meanwhile, TD Cowen has reaffirmed its Hold rating on Southwest shares with a consistent price target of $25.00, reflecting cautious optimism about the company's future prospects following a recent settlement with an activist investor.
Southwest Airlines recently reported record operating revenues of nearly $7 billion in Q3 2024, despite facing operational challenges such as recent hurricanes and a Boeing (NYSE:BA) strike. The company also expressed confidence in achieving its long-term financial targets, including a return on invested capital of at least 15% by 2027.
Additionally, Southwest has made significant strategic moves. The company terminated its common stock purchase rights, a decision disclosed in a recent 8-K filing with the Securities and Exchange Commission. These are recent developments that investors in Southwest Airlines Co. should consider.
InvestingPro Insights
As Elliott Investment Management adjusts its position in Southwest Airlines, recent data from InvestingPro sheds light on the airline's current financial standing and market performance.
Southwest Airlines has demonstrated strong momentum recently, with InvestingPro data showing a significant 17.53% price return over the last three months and an impressive 44.97% return over the past year. This upward trend aligns with an InvestingPro Tip noting that 8 analysts have revised their earnings upwards for the upcoming period, suggesting growing optimism about the company's near-term prospects.
Despite these positive indicators, Southwest's financial health presents a mixed picture. The company holds more cash than debt on its balance sheet, which is a positive sign for its liquidity. However, another InvestingPro Tip cautions that short-term obligations exceed liquid assets, indicating potential cash flow challenges.
For investors seeking a deeper understanding of Southwest Airlines' financial position and growth prospects, InvestingPro offers 7 additional tips that could provide valuable insights for investment decisions.
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