Citigroup Maintains Buy, PT on Southwest Airlines

Citigroup reiterates its Buy rating and 1-year price target of $11 per share on Southwest Airlines Co. LUV after takeaways of progressing integration, positioning and ROIC outlook. According to Citigroup, “Management admits that limited visibility exists beyond 4Q 2011, but current quarter trends remain strong with October unit revenue up 6% YoY against a difficult comparison. While not anticipated, the company appears to believe that given another downturn similar to 2009 where US airline industry passenger revenue and passenger unit revenue fell 18% YoY and 13%, respectively, Southwest should be able to again walk away with lower declines (2009: -6% and -1%, respectively).” LUV traded at $8.17, down 3.54 percent on Wednesday's close.