Shares of Southwest Airlines Co. (LUV) were down 1% to close at $55.19 on June 23, after the company announced that its CEO Gary Kelly will step down next year and will be succeeded by Executive Vice President Corporate Services, Robert Jordan, effective February 1, 2022.
Kelly will transition as the Board’s Executive Chairman with a desire to hold that position through 2026, subject to the outcome of the annual elections.
CEO Gary Kelly commented, “Bob and I have worked side by side for more than 30 years. He is a gifted and experienced executive and well-prepared to take on this important role. Working closely with President Tom Nealon and Chief Operating Officer Mike Van de Ven, we will begin developing transition plans in the coming weeks and months. These three top-notch Leaders make for a powerful team to lead us forward.”
Kelly, 66, has been the CEO since 2004, leading Southwest through some of the airline industry’s most turbulent times over the years. As CEO, he led several initiatives, including the acquisition of AirTran Airways, the inauguration of international flights, and the introduction of the Boeing 737 MAX 8 into the airline’s fleet. (See LUV stock chart on TipRanks)
Jordan, 60, has been with the company since 1988 and has served in many roles including Director of Revenue Accounting and Corporate Controller, VP and SVP of various segments, among others. Jordan has also been part of several initiatives including the AirTran deal, the development of the new e-commerce platform, and the Rapid Rewards Loyalty program. During the COVID-19 pandemic, he played an important role in reducing the airline’s labor costs and avoiding layoffs and furloughs.
Cowen & Co. analyst Conor Cunningham recently initiated coverage on LUV with a Buy rating and the price target of $74 (34.1% upside potential).
Cunningham is bullish on airline stocks amidst rising vaccination rates, falling COVID-19 cases, easing travel restrictions, and pent-up travel demand. He expects a travel boom during the 2021 Winter Holiday Season.
Overall, the stock has a Strong Buy consensus rating, based on 9 Buys and 3 Holds. The average analyst Southwest Airlines price target of $71.80 implies 30.1% upside potential from current levels.
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