Dark Clouds Roll in After Airliner Issues Dreary Forecast

Boeing's recent woes add to delivery fears

Jake Scott

Deputy Editor

Mar 12, 2024 at 8:57 AM

Shares of Southwest Airlines Co (NYSE:LUV) are 7.9% lower before the bell, after the airliner adjusted its full year 2024 guidance lower. In a statement, Southwest Airlines said it was "reevaluating all prior full year 2024 guidance, including the expectation for capital spending" amid delayed deliveries from embattled Boeing (BA). In addition to expectations of flat to a no more than 2% rise in revenue, the company also showed weaker-than-expected leisure bookings for the first quarter.

On the charts, LUV is set to open near the $31 area, or its lowest level of trading since early February. Support from the 200-day moving average is moving into place with today's drop, but the equity is set to breach its year-over-year breakeven mark and add to a 1.4% March deficit.

It's worth pointing out that LUV ranks high on the Schaeffer's Volatility Scorecard (SVS), with a score of 99 out of 100. This suggests the security exceeded option traders' volatility expectations in the past 12 months, which is a boon for premium traders.

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