Southwest and American Airlines Face a Jet Fuel Test as Earnings Arrive

Impact · against what's priced in

The current price for both airlines already heavily discounts fuel headwinds, making the recent spike to $110 Brent crude a confirmation of bearish assumptions rather than a new catalyst. Southwest faces a more immediate test as the market awaits confirmation that its loyalty revenue can offset the analyst-driven EPS cut to $0.5715.

LUV−0.30

Challenges what's priced in

The price assumes

The near-term earnings shortfall, as the price fully digested the lowered full-year EPS guidance of $3.25 to $4.25 and the third-quarter forecast below expectations.