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LUV

Southwest

$53.98

-0.925 (-1.68%)

, BA

Boeing

$350.00

2.14 (0.62%)

07:12
12/12/19
12/12
07:12
12/12/19
07:12

Southwest announces agreement with Boeing for compensation over MAX grounding

Southwest Airlines (LUV) announced that it recently reached a confidential agreement with Boeing (BA) to compensate Southwest for a portion of projected financial damages related to the grounding of the airline's Boeing 737 MAX aircraft. In light of this agreement, the Southwest board has authorized a discretionary, incremental profitsharing accrual for employees, which is tied to the projected reduction in operating income for annual 2019 due to the MAX groundings. The company currently estimates this incremental profitsharing accrual to be approximately $125M. This incremental profitsharing award will be funded as part of the company's annual 2019 profitsharing distribution in 2020, in accordance with normal ProfitSharing Plan policies and board approval. The company plans to provide 2019 profitsharing details early next year, including the percentage each eligible Southwest employee will receive. The company continues to engage in ongoing discussions with Boeing regarding compensation for damages related to the MAX groundings. The details of these discussions and the settlement with Boeing are confidential. While still evaluating the applicable accounting principles, the company currently expects to account for substantially all of the compensation as a reduction in cost basis of both existing and future firm aircraft orders, which will reduce depreciation expense in future years. The Boeing 737 MAX fleet has been grounded since the FAA's order was issued on March 13. Southwest Airlines continues to monitor information from Boeing and the FAA on the impending 737 MAX software enhancements and training requirements. "The airline remains confident that, once certified by the FAA, the enhancements will support a safe return of the 737 MAX aircraft," Southwest stated.

LUV

Southwest

$53.98

-0.925 (-1.68%)

BA

Boeing

$350.00

2.14 (0.62%)

  • 12

    Dec

  • 23

    Jan

LUV Southwest
$53.98

-0.925 (-1.68%)

10/31/19
SBSH
10/31/19
INITIATION
SBSH
Citi initiates the U.S. airlines sector, says Delta is top pick
Citi analyst Stephen Trent initiated the U.S. airlines sector in a note titled "Initiating coverage: Pick Your Routes Carefully." The analyst initiated Delta (DAL), United Airlines (UAL), and Spirit Airlines (SAVE) with Buy ratings, Southwest (LUV) with a Neutral rating, and American Airlines (AAL) with a Sell rating. Trent said that Delta was his top pick, citing attractive revenue diversity, relatively smooth earnings streams, and solid alliance networks. Trent is Neutral on Southwest as he believes the company's valuation relative to growth, along with 737 MAX risks, put the shares near fair value. The analyst has a Sell on American Airlines due to the company's high leverage, 2020 MAX redeployment, pilot contract negotiations, and valuations concerns.
11/12/19
UBSW
11/12/19
INITIATION
Target $60
UBSW
Neutral
Southwest initiated with a Neutral at UBS
UBS analyst Myles Walton initiated coverage of Southwest with a Neutral rating and $60 price target.
11/12/19
UBSW
11/12/19
NO CHANGE
UBSW
UBS rolls out 'cautious' view of U.S. airlines, names JetBlue, United top picks
UBS analyst Myles Walton initiated coverage of the U.S. airlines space with six company initiations including two Buys, three Neutral ratings and one Sell. His view on the group into 2020 is "cautious" given a combination of potential economic softening and a "sharp" increase in capacity, which could have a negative impact on pricing. He started JetBlue (JBLU) with a Buy rating and $25 price target, citing its capacity growth, revenue initiatives and cost reduction program, which he believes could add up to the airline delivering 30%+ EPS growth in 2020. He also started United Airlines (UAL) with a Buy rating and $110 price target, stating that his bullish view is supported by the company's "superior" cost performance. Walton started American Airlines (AAL) with a Sell rating and a $27 price target, stating that "2020 could provide a sharper test [for American] than others in the industry" given the company's elevated leverage and "fragility already seen in the network in 2019." Walton started Delta Air Lines (DAL) with a Neutral rating and $62 price target, Southwest (LUV) with a Neutral rating and $60 price target and Alaska Air (ALK) with a Neutral rating and $75 price target.
11/13/19
11/13/19
INITIATION

Fly Intel: Top analyst initiations
Catch up on today's top analyst initiations with this list compiled by The Fly: 1. Apple (AAPL) and Sonos (SONO) were initiated with an Outperform at RBC Capital, while Jabil (JBL) was initiated with a Sector Perform. 2. JetBlue (JBLU) and United Airlines (UAL) were initiated with a Buy at UBS, while Delta Air Lines (DAL) and Southwest (LUV) were initiated with a Neutral, and American Airlines (AAL) was initiated with a Sell. 3. ManpowerGroup (MAN) initiated with a Buy at CL King. 4. Concho Resources (CXO) initiated with an Outperform at Scotiabank. This list is just a portion of The Fly's analyst coverage. To see The Fly's full Street Research coverage, click here.
BA Boeing
$350.00

2.14 (0.62%)

10/28/19
JEFF
10/28/19
NO CHANGE
Target $420
JEFF
Buy
Boeing price target lowered to $420 from $430 at Jefferies
Jefferies analyst Sheila Kahyaoglu lowered her price target for Boeing to $420 from $430 while keeping a Buy rating on the shares. With the MAX potentially re-entering service in early 2020 and stepping up in rate in late 2020, the 787 step down and 777X delay "creates a more balanced production profile," Kahyaoglu tells investors in a research note. The analyst models an average of ~$31 per share in free cash flow per year over 2020 to 2022.
10/29/19
BUCK
10/29/19
NO CHANGE
Target $365
BUCK
Neutral
Boeing price target lowered to $365 from $395 at Buckingham
Buckingham analyst Richard Safran lowered his price target for Boeing to $365 from $395 and reiterated his Neutral view, telling investors in a research note that the MAX will likely get certified in 4Q19 or early 1Q20, and after deliveries start, sentiment should improve as investors gain visibility into when cash flow, capital deployment, and orders return to pre-MAX crisis levels. He sees two scenarios going forward, with a "reasonable" chance for both: 1) book to bill returns to greater than 1x and investors continue to value Boeing based on 15-17x free cash flow estimates that grow $1-$2/share per year off of 2021E $30/share or; 2) traffic growth decelerates, Boeing loses market share, book to bill falls to less than1x, and multiples compress to the historical less than 10-12x peak free cash flow.
10/31/19
BERN
10/31/19
DOWNGRADE
Target $61
BERN
Market Perform
Boeing's MAX re-launch to have large impact on Southwest, says Bernstein
Bernstein analyst David Vernon downgraded Southwest (LUV) to Market Perform from Outperform with a $61 price target. In a research note to investors, the analyst says he thinks the market is pricing in all the good news on the return of Boeing's (BA) MAX and not appreciating how disruptive its return could be on either the unit revenue or cost fronts. Vernon says he thinks Boeing's re-launch of the MAX will have disproportionately large impact on Southwest's own unit revenue and require start-up costs that are difficult to anticipate.
12/09/19
COWN
12/09/19
NO CHANGE
Target $419
COWN
Outperform
Boeing price target lowered to $419 from $445 at Cowen
Cowen analyst Cai von Rumohr lowered his price target on Boeing to $419 from $445 to reflect a slower recovery than expected as the timeline for the MAX certification looks to be slipping. The analyst also said there is a potential for air traffic to slow which bears watching. von Rumohr maintained his Outperform rating on Boeing shares.

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UCFC

United Community Financial

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FDEF

First Defiance Financial

$31.12

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T

AT&T

$38.36

0.33 (0.87%)

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Comcast

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CMCSA

Comcast

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Comcast

$0.00

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SNE

Sony

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Lionsgate

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DIS

Disney

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ViacomCBS

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STIM

Neuronetics

$4.38

-0.01 (-0.23%)

17:00
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17:00
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TCMD

Tactile Systems

$60.76

-2.74 (-4.31%)

16:55
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EFSC

Enterprise Financial

$48.49

0.16 (0.33%)

16:45
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Earnings
Enterprise Financial reports Q4 EPS $1.09, consensus $1.09 »

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  • 21

    Jan

TGP

Teekay LNG

$14.73

-0.26 (-1.73%)

16:33
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WES

Western Midstream

$20.60

-0.55 (-2.60%)

16:31
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  • 28

    Feb

CPG

Crescent Point Energy

$4.20

-0.08 (-1.87%)

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CHSCP

CHS Inc.

$28.85

0.13 (0.45%)

16:26
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CHS Inc. names Olivia Nelligan as Chief Financial Officer »

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GMAB

Genmab

$22.73

-0.13 (-0.57%)

, JNJ

Johnson & Johnson

$149.07

0.82 (0.55%)

16:25
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GMAB

Genmab

$22.73

-0.13 (-0.57%)

JNJ

Johnson & Johnson

$149.07

0.82 (0.55%)

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  • 22

    Jan

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PRPO

Precipio

$2.09

-0.02 (-0.95%)

16:25
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Conference/Events
Precipio to host shareholder update conference call »

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  • 20

    Jan

TILE

Interface

$17.37

0.23 (1.34%)

16:22
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Interface names Dan Hendrix as President, CEO »

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IBCP

Independent Bank

$22.51

-0.26 (-1.14%)

16:19
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JAZZ

Jazz Pharmaceuticals

$151.00

-0.56 (-0.37%)

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  • 29

    Jan

AMRN

Amarin

$19.91

-0.15 (-0.75%)

16:13
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SPY

SPDR S&P 500 ETF Trust

$331.98

1.08 (0.33%)

, SPX

S&P 500

$0.00

(0.00%)

16:09
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Periodicals
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SPDR S&P 500 ETF Trust

$331.98

1.08 (0.33%)

SPX

S&P 500

$0.00

(0.00%)

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XOM

Exxon Mobil

$68.55

-0.26 (-0.38%)

, HES

Hess Corp.

$69.87

-0.45 (-0.64%)

16:07
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$68.55

-0.26 (-0.38%)

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Hess Corp.

$69.87

-0.45 (-0.64%)

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TSLA

Tesla

$510.34

-3.065 (-0.60%)

16:04
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  • 29

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EADSY

Airbus

$0.00

(0.00%)

16:02
01/20/20
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AAPL

Apple

$318.66

3.33 (1.06%)

15:41
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Apple CEO says global corporate tax system must be overhauled, Reuters reports »

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  • 28

    Jan

GOOG

Alphabet

$1,480.28

28.34 (1.95%)

, GOOGL

Alphabet Class A

$1,479.12

29.29 (2.02%)

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GOOG

Alphabet

$1,480.28

28.34 (1.95%)

GOOGL

Alphabet Class A

$1,479.12

29.29 (2.02%)

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    Feb

GOOG

Alphabet

$1,480.28

28.34 (1.95%)

, GOOGL

Alphabet Class A

$1,479.12

29.29 (2.02%)

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Alphabet

$1,480.28

28.34 (1.95%)

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Alphabet Class A

$1,479.12

29.29 (2.02%)

MSFT

Microsoft

$167.06

0.82 (0.49%)

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BA

Boeing

$324.11

-7.89 (-2.38%)

, AER

AerCap

$62.35

-0.18 (-0.29%)

15:10
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01/20
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Periodicals
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BA

Boeing

$324.11

-7.89 (-2.38%)

AER

AerCap

$62.35

-0.18 (-0.29%)

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