Jim Cramer says it is 'too early to buy' Southwest on its brutal five-session slide

Published Mon, Apr 29 202412:31 PM EDT

CNBC's Jim Cramer expressed sympathy for Southwest as the airline stock was further punished by a new sell call following last week's wider-than-expected quarterly loss on Boeing aircraft delays. "I don't know what you can do. A lot of this is not their fault. It's Boeing's fault," Cramer said Monday on "Squawk on the Street." "I don't know. It's too early to buy" the stock. Southwest fell more than 1% on Monday, extending its losing streak to five straight sessions — including last Thursday's almost 7% earnings-day decline. The stock has lost 8% year to date. LUV YTD mountain Southwest Airlines YTD In a Sunday note to clients, Jefferies lowered its Southwest rating to a sell-equivalent underperform and cut its price target on the stock to $20 per share from $28. The analysts raised concerns about a smaller fleet in 2024, optimization efforts that "seem to be failing" to improve financial performance, and a cash burn that threatens the dividend. This piece from Jefferies is "really brutal," Cramer said. He added that the quarterly payout "has been a big help" for investors in Southwest, which has an annual dividend yield of around 2.7%. Due to the Boeing woes, Southwest also announced last week plans to cease operations at several airports and reduce capacity at others. It revealed plans to end the year with 2,000 fewer employees than in 2023. (See here for a full list of the stocks in Jim Cramer's Charitable Trust, the portfolio used by the CNBC Investing Club.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.