Analysts: Southwest Airlines is prime candidate for Warren Buffett takeover

Billionaire Warren Buffett’s purchase of a massive stake in the 4 largest US airlines — including Southwest (LUV) and American — may be more than a change of heart about an industry he has historically and famously berated. It may a first step in a major airline takeover in a major airline takeover, according to market rumblings and Morgan Stanley analysts. “We view a full-scale acquisition of an airline by Berkshire as a possibility and not worth dismissing, particularly if the stocks weaken,” Morgan Stanley analysts said in a note to clients Wednesday. Southwest is the leading candidate for a buyout, the Morgan Stanley analysts wrote. “Of the Big 4, we highlight LUV’s domestic focus, robust and sustainable FCF (free cash flow), range of growth opportunities, defensible cost structure, and more tenured management team". <br/>