Dream over for Southwest?

Prudential Equity Group downgraded the stock, saying the company's business model "does not appear to be working anymore."

Bob McAdoo lowered his rating to "Underweight" from "Overweight" and reduced his price target to $16 per share from $22.

Foremost among Southwest's problems is over-expansion: the airline continues to swell its fleet at the rate of about 35 planes per year, even though it is losing money on many of its recently added routes. McAdoo added that Southwest lacks direction, and lowered his target price from $22 to $16, and dropped second quarter estimates to 26 cents from 41 cents as well. "Lacking some new direction, we believe LUV shares are going nowhere," McAdoo says.

What is going on? Has reality set in?

Your opinions please

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http://www.forbes.com/markets/2007/0...markets10.html