10 Best Airline Stocks to Buy For 2024

4. Southwest Airlines Co (NYSE:LUV)

Number of Hedge Fund Investors: 33

With a dividend yield of 2.6%, Texas-based Southwest Airlines Co (NYSE:LUV) is one of the best airline stocks to buy in 2024 according to smart money investors. Of the 919 hedge funds tracked by Insider Monkey 33 hedge funds reported owning stakes in Southwest Airlines Co (NYSE:LUV). The biggest stake in Southwest Airlines Co (NYSE:LUV) is owned by Richard Oldfield’s Oldfield Partners which owns a $71 million stake in Southwest Airlines Co (NYSE:LUV). In April, Southwest Airlines Co (NYSE:LUV) shares fell after Southwest Airlines Co (NYSE:LUV) report a loss of $0.36 per share. Wall Street analysts were expecting Southwest Airlines Co (NYSE:LUV) to earn $0.02 per share. Revenue in the quarter jumped 10.3% year over year, missing estimates by $120 million. Like other major airlines, Southwest Airlines Co (NYSE:LUV) is bearing the brunt of the grounding of Boeing (BA) 737 MAX 9.

Southwest Airlines Co’s (NYSE:LUV) rising labor and maintenance costs in the first quarter worried investors as well as the Wall Street. Recently, Argus downgraded the stock to Hold, saying higher employee costs and delayed deliveries would cause Southwest Airlines Co (NYSE:LUV) to take longer than expected to make a turnaround. Jefferies also downgraded the stock to Hold in April, citing near-term pressures. Jefferies analyst Sheila Kahyaoglu said Southwest Airlines Co’s (NYSE:LUV) low-cost operating model is challenged by higher employee costs and other inflationary pressures. One-year average analyst price estimate for Southwest Airlines Co (NYSE:LUV) is $28, while the stock’s current price is hovering around $27. This shows that based on Wall Street analyst price targets, there isn’t much upside left to the stock in the near term.