Wall Street Analysts are Downgrading These 5 Stocks

4. Southwest Airlines Co. (NYSE:LUV)

Number of Hedge Fund Holders: 45

Argus lowered its ratings for Southwest Airlines Co. (NYSE:LUV) from “Buy” to “Hold” on Monday, August 15, 2022. Argus analyst John Staszak thinks capacity challenges and inflationary pressures could impact the growth of the Texas-based airline.

Staszak doesn’t see an upside for the stock until there is more clarity around cost stabilization. He reduced his earnings estimate by 5c to $2.45 per share for fiscal 2022. However, Staszak remains optimistic about the long-term growth prospects of Southwest Airlines Co. (NYSE:LUV).

Senior management of Southwest Airlines Co. (NYSE:LUV) also talked about inflationary pressures during the second-quarter earnings call last month. CEO Bob Jordan said in a statement:

“Travel demand surged in second quarter, and thus far, strong demand trends continue in third quarter 2022. As anticipated, we experienced inflationary pressures and headwinds from operating at suboptimal productivity levels in second quarter, which we expect will continue in second half 2022.”