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Southwest Airlines (NYSE: LUV) was downgraded by analysts at Morgan Stanley from an “equal weight” rating to an “underweight” rating in a research report issued to clients and investors on Wednesday, AnalystRatings.Net reports. They currently have a $13.00 target price on the stock. Morgan Stanley’s price target indicates a potential downside of 2.62% from the stock’s previous close.

The analysts wrote, “Now, after having kept pace with much more levered airlines YTD, if the cycle continues to hold firm – as we expect it to – we believe LUV is positioned to underperform the group from here. Our view is based on the following: 1. 2013 consensus estimates are >10% too high considering an emerging pattern of PRASM underperformance that is likely to continue through YE13, 2. The company’s 15% ROIC target is not only unattainable in 2013 but is also a high hurdle in 2014, in our view, 3. As an Old Guard low-cost carrier, LUV has seen many of its former competitive advantages dwindle vs. peers, a theme which injects under-appreciated downside risk into shares.”

Shares of Southwest Airlines (NYSE: LUV) opened at 13.35 on Wednesday. Southwest Airlines has a 52 week low of $8.45 and a 52 week high of $14.56. The stock’s 50-day moving average is currently $13.97. The company has a market cap of $9.643 billion and a P/E ratio of 26.07.

Southwest Airlines (NYSE: LUV) last issued its quarterly earnings data on Thursday, April 25th. The company reported $0.07 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.02 by $0.05. The company had revenue of $4.10 billion for the quarter, compared to the consensus estimate of $4.08 billion. During the same quarter in the prior year, the company posted ($0.02) earnings per share. The company’s quarterly revenue was up 2.3% on a year-over-year basis. Analysts expect that Southwest Airlines will post $1.04 EPS for the current fiscal year.

A number of other firms have also recently commented on LUV. Analysts at CRT Capital reiterated a “buy” rating on shares of Southwest Airlines in a research note to investors on Tuesday, June 18th. They now have a $18.00 price target on the stock. Separately, analysts at Ned Davis Research downgraded shares of Southwest Airlines from a “buy” rating to a “neutral” rating in a research note to investors on Monday, June 3rd. Finally, analysts at Avondale Partners upgraded shares of Southwest Airlines from a “market perform” rating to an “outperform” rating in a research note to investors on Friday, May 17th.

Two research analysts have rated the stock with a sell rating, seven have given a hold rating and nine have assigned a buy rating to the company’s stock. The stock presently has a consensus rating of “Hold” and a consensus target price of $14.76.

The company also recently declared a quarterly dividend, which is scheduled for Wednesday, June 26th. Shareholders of record on Wednesday, June 5th will be given a dividend of $0.04 per share. This represents a $0.16 dividend on an annualized basis and a yield of 1.20%. The ex-dividend date of this dividend is Monday, June 3rd. This is a positive change from Southwest Airlines’s previous quarterly dividend of $0.01.

Southwest Airlines Co operates Southwest Airlines, a passenger airline, which provides scheduled air transportation in the United States.

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