JPMorgan Chase & Co. Has Lowered Expectations for Southwest Airlines (NYSE:LUV) Stock Price

Key Points

• JPMorgan lowered Southwest Airlines’ price target to $58 from $59 while maintaining an “overweight” rating, implying roughly 40.9% upside from the reported $41.16 share price.
• Analyst sentiment remains mixed: MarketBeat’s consensus rating is “Hold,” with a $47.36 average target, based on nine Buy, nine Hold, and four Sell ratings.
• Southwest exceeded quarterly earnings and revenue expectations, but rising fuel costs and reduced profit guidance are weighing on investor sentiment and offsetting the strong operating results.

Southwest Airlines (NYSE:LUV - Get Free Report) had its price objective lowered by analysts at JPMorgan Chase & Co. from $59.00 to $58.00 in a research note issued on Friday, Benzinga reports. The brokerage presently has an "overweight" rating on the airline's stock. JPMorgan Chase & Co.'s price target would suggest a potential upside of 40.90% from the stock's current price.

A number of other equities research analysts also recently issued reports on LUV. Zacks Research downgraded shares of Southwest Airlines from a "hold" rating to a "strong sell" rating in a research report on Tuesday, October 6th. Rothschild & Co Redburn upgraded shares of Southwest Airlines from a "sell" rating to a "neutral" rating and increased their price objective for the company from $35.00 to $40.00 in a research note on Friday, September 18th. Weiss Ratings raised shares of Southwest Airlines from a "hold (c)" rating to a "hold (c+)" rating in a research report on Tuesday, August 18th. UBS Group dropped their target price on shares of Southwest Airlines from $53.00 to $52.00 and set a "buy" rating on the stock in a research report on Friday, October 16th. Finally, Citigroup cut their target price on Southwest Airlines from $55.00 to $50.00 and set a "neutral" rating on the stock in a research note on Friday, July 24th. Nine equities research analysts have rated the stock with a Buy rating, nine have given a Hold rating and four have issued a Sell rating to the company's stock. Based on data from MarketBeat, the company has a consensus rating of "Hold" and a consensus target price of $47.36.

Southwest Airlines Stock Down 2.1%

Shares of NYSE LUV traded down $0.86 during trading on Friday, hitting $41.16. The stock had a trading volume of 3,707,104 shares, compared to its average volume of 7,425,341. Southwest Airlines has a 12 month low of $29.26 and a 12 month high of $55.11. The company has a debt-to-equity ratio of 0.54, a current ratio of 0.49 and a quick ratio of 0.42. The company has a market capitalization of $20.14 billion, a PE ratio of 25.24, a PEG ratio of 1.06 and a beta of 1.16. The firm has a fifty day moving average of $40.62 and a two-hundred day moving average of $42.89.

Southwest Airlines (NYSE:LUV - Get Free Report) last announced its earnings results on Wednesday, October 21st. The airline reported $0.66 EPS for the quarter, beating the consensus estimate of $0.57 by $0.09. Southwest Airlines had a net margin of 3.34% and a return on equity of 18.07%. The company had revenue of $8.42 billion during the quarter, compared to the consensus estimate of $8.25 billion. During the same quarter in the prior year, the company posted $0.11 earnings per share. The firm's revenue for the quarter was up 21.2% on a year-over-year basis. As a group, equities research analysts forecast that Southwest Airlines will post 2.91 EPS for the current fiscal year.

Institutional Trading of Southwest Airlines

Several hedge funds and other institutional investors have recently modified their holdings of LUV. Primecap Management Co. CA purchased a new stake in shares of Southwest Airlines during the 2nd quarter valued at approximately $2,509,179,000. BlackRock Inc. bought a new position in Southwest Airlines in the 2nd quarter worth approximately $1,538,382,000. Dimensional Fund Advisors LP grew its stake in Southwest Airlines by 2.1% in the 1st quarter. Dimensional Fund Advisors LP now owns 5,763,154 shares of the airline's stock valued at $216,472,000 after buying an additional 117,833 shares in the last quarter. Bank of New York Mellon Corp purchased a new position in Southwest Airlines in the 2nd quarter valued at approximately $234,872,000. Finally, U S Global Investors Inc. grew its stake in Southwest Airlines by 13.9% in the 3rd quarter. U S Global Investors Inc. now owns 2,260,841 shares of the airline's stock valued at $94,141,000 after buying an additional 275,204 shares in the last quarter. Institutional investors own 80.82% of the company's stock.

Key Headlines Impacting Southwest Airlines

Here are the key news stories impacting Southwest Airlines this week:

• Positive Sentiment: Southwest reported record third-quarter revenue of approximately $8.42 billion, up 21.2% year over year. Adjusted EPS of $0.66 exceeded the roughly $0.57 consensus estimate, while revenue per available seat mile increased 21.6% and the operating margin expanded to 4.5%. LUV Q3 Earnings Beat on Record Revenues and Higher Fares
• Positive Sentiment: Strong fares, passenger demand and ancillary revenue helped Southwest expand margins despite substantially higher operating costs. Management also indicated that fourth-quarter unit revenue could rise 19% to 21% year over year. Southwest Airlines posts record revenue as fuel costs surge
• Neutral Sentiment: Wells Fargo initiated a Hold rating, while Susquehanna reduced its price target to $43 from $45, signaling limited near-term upside relative to the recent share price. Susquehanna Adjusts Price Target on Southwest Airlines
• Negative Sentiment: Southwest lowered its full-year 2026 adjusted EPS guidance to $2.60–$2.85, versus a $2.85 analyst consensus. Fourth-quarter adjusted EPS guidance of $0.55–$0.80 is also below the $0.88 consensus estimate. Southwest Airlines cuts 2026 profit forecast on higher fuel
• Negative Sentiment: Fuel expense increased by $821 million year over year, and management said it is planning for elevated jet-fuel prices to persist into 2027. The combination of higher fuel costs and cautious analyst sentiment is outweighing the strong quarterly results for investors today. US airlines favor higher fares over fuller planes as fuel costs squeeze profits

About Southwest Airlines

Southwest Airlines Co is a major U.S. passenger airline headquartered in Dallas, Texas. The company provides scheduled air transportation for leisure and business travelers, with service connecting cities throughout the United States and selected destinations in Mexico, the Caribbean, and Central America.

Southwest is known for its predominantly domestic network and point-to-point operating model. In addition to passenger flights, the company offers ancillary services and air cargo transportation.

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