Southwest Airlines (LUV)

[Scripo]

Southwest (LUV), one of only two US airlines with an investment-grade credit rating, was upgraded last week by Moody's thanks to its strong growth prospects--particularly at Dallas Love Field and Washington's Reagan National Airport--and limited exposure to international routes even as it is now is putting its toe in nearby overseas waters. In a fresh report today, the ratings firm postulates LUV's margins will remain the best in the industry in spite of its high labor costs. LUV spent 28.5c/dollar of revenue on employees last year, compared with an average of 21.5c for its US rivals. Shares are up 1.3% today at $29.65 and just shy of setting new record highs. ([e-mail]; @ SusanCareyWSJ)