Market Overview

Southwest Airlines 'Best-Positioned' To Weather Downturn, BofA Says In Upgrade

Southwest Airlines 'Best-Positioned' To Weather Downturn, BofA Says In Upgrade

U.S. airlines may have the liquidity to weather tough times, but the coronavirus pandemic is an extraordinary time that's bringing a massive hit to revenue, according to BofA Securities.

The United, Southwest Analyst

Andrew Didora downgraded United Airlines Holdings Inc (NASDAQ: UAL) from Buy to Neutral and reduced the price target from $66 to $33.

The analyst upgraded Southwest Airlines Co (NYSE: LUV) from Neutral to Buy and lowered the price target from $48 to $43. 

Benzinga is covering every angle of how the coronavirus affects the financial world. For daily updates, sign up for our coronavirus newsletter.

Takeaways On United, Southwest 

The airline industry has seen a severe deterioration in fundamentals and there seems to be no bottom, with cancellations outpacing new bookings, Didora said in a Monday note. (See his track record here.)

Airline revenue could decline by 36% in 2020, an unprecedented hit and “meaningfully worse” than the four quarters following 9/11, when airline revenue declined by 19%, and the financial crisis, when airline revenue was down 17%, the analyst said. 

Booking trends are “very concerning” and estimates have been slashed to losses for the full year for all carriers, he said, adding that he expects dividends to be suspended or cut across all airlines.

Southwest Airlines is “the highest quality airline in the group with a very conservative balance sheet and low earnings volatility," Didora said.

"As such, we believe it is best positioned to weather the current coronavirus outbreak given its significant liquidity and low net leverage entering the year."

United, Southwest Price Action

Southwest shares were trading 3.94% higher at $33.20 at the time of publication Monday, while United shares were trading 4.2% higher at $25.53. 

Related Links:

105 Biggest Movers From Friday

Benzinga's Top Upgrades, Downgrades For March 23, 2020

Latest Ratings for LUV

Mar 2020Bank of AmericaMaintainsBuy
Mar 2020Cowen & Co.UpgradesMarket PerformOutperform
Mar 2020B of A SecuritiesUpgradesNeutralBuy

View More Analyst Ratings for LUV
View the Latest Analyst Ratings


Related Articles (LUV + UAL)

View Comments and Join the Discussion!

Posted-In: Andrew DidoraAnalyst Color Upgrades Downgrades Price Target Travel Analyst Ratings General Best of Benzinga

Latest Ratings

VOYAPiper SandlerMaintains58.0
PRUPiper SandlerMaintains64.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at