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Research Alert: CFRA Lifts Opinion On Shares Of Southwest Airlines Co To Hold From Sell

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Oil prices have retreated ~15% from May's $108 high. We upgrade LUV to Hold from Sell, raise our price target by $10 to $43, and lift our 2027 EPS estimate to $4.52 from $3.65 while keeping 2026's at $2.79. Our target reflects 9.5x our 2027 EPS (from 9x our 2026 EPS). Although oil remains a key variable, we have grown more optimistic on LUV-specific drivers, including traction on its new pricing model (Q1 unit revenue +11.2% Y/Y), which could boost revenue growth in the high teens alongside higher airfare. A shift away from open seating could improve LUV's ability to capture higher-yielding corporate and premium travel, an area that has benefited peers. Similar to peers, LUV noted Q1 demand trends across geographies and customer segments remain strong, supporting our view that accelerating revenue can offset fuel headwinds. Our Hold rating and high-single-digit multiple reflect that the new model still needs to prove out on profitability and oil volatility remains a risk.

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Research Alert: CFRA Reiterates Sell Opinion On Shares Of Delta Air Lines, Inc.

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:Oil prices are down 15% from May's $108 high on U.S.-Iran deal optimism. We maintain our Sell rating and raise our price target by $14 to $73. We lift our 2026 EPS estimate to $5.61 from $5.34 and 2027's to $6.89 from $5.98. Our target reflects 10.6x 2027 EPS, rolled forward from 11x 2026. Our estimates reflect lower fuel costs but remain below consensus on our view that oil/crack spreads may stay above 2024-2025 levels. We view DAL's cost structure favorably and believe the company can generate profits through this volatility, but current valuations and consensus estimates appear to reflect excessive optimism. The 2027 consensus of $8.08 implies full oil normalization and is 15% above our estimate. DAL's refinery vertical integration provides a partial hedge against crack spreads, and premium/corporate travel demand remains solid. However, with the stock pricing in a benign fuel environment, we see limited upside and maintain Sell. A key risk to our view is oil prices easing faster than expected.

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