Dahlman Rose & Co. Reiterates Hold Rating On Southwest Airlines Co. (LUV)

Helane Becker, an analyst of Dahlman Rose & Co., reiterated a hold rating on Southwest Airlines Co. LUV despite better than expected earnings and a positive outlook for 2010 and 2011. The Analyst estimates LUV's 2010 EPS at $0.73, and she sees 2011 EPS at $0.84. This means that LUV is currently trading at 16.5 times estimated 2010 EPS. Since its peers are trading at 9.5 P/E, analyst concluded that LUV is trading with a premium in comparison to its peers. Management thinks that Southwest Airlines Co. (LUV) will have a good 3rd quarter, with strong July and August bookings. Dahlman Rose & Co. is also expecting a strong quarter for LUV. Helane Becker wrote in her report that Southwest Airlines Co. (LUV) has a strong balance sheet, and noted that it has $3.1 billion in cash. Its total debt at the end of the quarter was $3.5 billion.