Southwest Airlines(LUV) ZACKS·2025-01-27 18:00Core Viewpoint - Southwest Airlines (LUV) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Recent Performance of Southwest Airlines - For the fiscal year ending December 2024, Southwest is expected to earn $0.84 per share, reflecting a decrease of 46.5% from the previous year [7]. - Over the past three months, the Zacks Consensus Estimate for Southwest has increased by 4.2%, indicating a positive trend in earnings estimates [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - The upgrade of Southwest to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [9].