5 Affordable Stocks to Buy With Good Earnings Growth

In this article, we will list the 5 Affordable Stocks to Buy With Good Earnings Growth. Please visit 8 Affordable Stocks to Buy With Good Earnings Growth if you would like to see the extended list and the methodology behind it.

5. Southwest Airlines Co. (NYSE:LUV)

Southwest Airlines Co. (NYSE:LUV) is one of the best affordable stocks to buy with good earnings growth. UBS cut the price target on Southwest Airlines Co. (NYSE:LUV) to $56 from $59 on March 23, reiterating a Buy rating on the shares. The firm told investors in a research note that jet fuel prices have risen toward $5/gallon on the Gulf Coast, which has prompted a preference for higher-quality airlines like Delta Air Lines (DAL) and United Airlines (UAL) with stronger margins. In the meantime, carriers with idiosyncratic demand drivers such as Southwest Airlines Co. (NYSE:LUV) may also fare relatively well. It also said that although March RASM gains were largely driven by favorable demand-supply conditions, increased fuel costs are expected to weigh on Q2 earnings, even with fare hikes contributing more to revenue.

Southwest Airlines Co. (NYSE:LUV) also received a rating update from Citi on March 20. The firm cut the price target on the stock to $44 from $54, reaffirming a Neutral rating on the shares and stating that it is updating estimates for higher fuel prices. It also sees downside risk to Q1, Q2, and 2026 estimates at nearly all airlines in its coverage. However, Citi also added that “downside to estimates does not necessitate downside to stocks across the board”, arguing that the fuel shock is likely to keep driving a “fuel wedge” driving meaningful relative outperformance at some airlines.

Southwest Airlines Co. (NYSE:LUV) is involved in the operation and management of a passenger airline. The company also provides ancillary services, including upgraded boarding, transportation of pets and unaccompanied minors, and early bird check-ins. Its operations are spread in the United States, the Commonwealth of Puerto Rico, Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.