Southwest Airlines (NYSE:LUV) Given New $54.00 Price Target at UBS Group

Key Points

• UBS raised its Southwest Airlines price target to $54 from $52 and maintained a “buy” rating, implying approximately 29.6% upside from the reported share price of $41.68.
• Analyst sentiment remains mixed: nine analysts rate the stock Buy, nine Hold, and four Sell, resulting in a consensus “Hold” rating and average price target of $47.45.
• Southwest beat quarterly expectations with $0.66 EPS versus $0.57 expected and $8.42 billion in revenue, but higher fuel costs and reduced profit guidance remain key risks to future margins.

Southwest Airlines (NYSE:LUV - Get Free Report) had its target price hoisted by equities research analysts at UBS Group from $52.00 to $54.00 in a note issued to investors on Friday, Benzinga reports. The brokerage currently has a "buy" rating on the airline's stock. UBS Group's target price would indicate a potential upside of 29.55% from the stock's current price.

Several other research analysts have also issued reports on LUV. Weiss Ratings upgraded Southwest Airlines from a "hold (c)" rating to a "hold (c+)" rating in a research note on Tuesday, August 18th. TD Cowen reduced their target price on shares of Southwest Airlines from $48.00 to $47.00 and set a "buy" rating on the stock in a research note on Friday, October 2nd. Wells Fargo & Company upped their target price on shares of Southwest Airlines from $44.00 to $50.00 and gave the stock an "equal weight" rating in a report on Tuesday, June 30th. Evercore upped their target price on shares of Southwest Airlines from $44.00 to $52.00 in a report on Thursday, June 25th. Finally, Jefferies Financial Group increased their target price on shares of Southwest Airlines from $44.00 to $50.00 and gave the stock a "hold" rating in a research report on Wednesday, July 1st. Nine 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. According to MarketBeat.com, the company presently has a consensus rating of "Hold" and an average price target of $47.45.

Southwest Airlines Price Performance

Shares of LUV stock traded down $0.35 during trading hours on Friday, hitting $41.68. The company had a trading volume of 5,297,349 shares, compared to its average volume of 7,432,312. 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 quick ratio of 0.42 and a current ratio of 0.49. The firm's fifty day moving average is $40.62 and its 200 day moving average is $42.89. The firm has a market capitalization of $20.39 billion, a price-to-earnings ratio of 25.52, a PEG ratio of 1.06 and a beta of 1.16.

Southwest Airlines (NYSE:LUV - Get Free Report) last posted its earnings results on Wednesday, October 21st. The airline reported $0.66 EPS for the quarter, topping the consensus estimate of $0.57 by $0.09. The business had revenue of $8.42 billion during the quarter, compared to the consensus estimate of $8.25 billion. Southwest Airlines had a return on equity of 18.07% and a net margin of 3.34%. Southwest Airlines's revenue was up 21.2% on a year-over-year basis. During the same quarter last year, the company earned $0.11 EPS. On average, sell-side analysts predict that Southwest Airlines will post 2.91 EPS for the current fiscal year.

Hedge Funds Weigh In On Southwest Airlines

Institutional investors have recently bought and sold shares of the business. Greenleaf Trust grew its holdings in shares of Southwest Airlines by 4.0% during the second quarter. Greenleaf Trust now owns 8,015 shares of the airline's stock worth $412,000 after purchasing an additional 311 shares during the last quarter. Evergreen Capital Management LLC raised its holdings in shares of Southwest Airlines by 3.0% in the third quarter. Evergreen Capital Management LLC now owns 11,474 shares of the airline's stock valued at $478,000 after buying an additional 339 shares during the last quarter. Grove Bank & Trust raised its holdings in shares of Southwest Airlines by 109.4% in the second quarter. Grove Bank & Trust now owns 871 shares of the airline's stock valued at $45,000 after buying an additional 455 shares during the last quarter. Resona Asset Management Co. Ltd. raised its holdings in shares of Southwest Airlines by 8.0% in the first quarter. Resona Asset Management Co. Ltd. now owns 6,738 shares of the airline's stock valued at $245,000 after buying an additional 498 shares during the last quarter. Finally, EverSource Wealth Advisors LLC lifted its position in Southwest Airlines by 11.0% during the 1st quarter. EverSource Wealth Advisors LLC now owns 5,131 shares of the airline's stock worth $193,000 after buying an additional 508 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: Q3 earnings and revenue beat expectations: Adjusted EPS was $0.66 versus the $0.57 consensus estimate, while revenue reached a record $8.42 billion, up 21.2% year over year. Higher fares, strong travel demand and increased ancillary revenue helped Southwest expand its operating margin to 4.5% from 0.5% a year earlier. Southwest Airlines third-quarter earnings report
• Positive Sentiment: Demand and unit revenue trends remain strong: Revenue per available seat mile rose 21.6%, and management indicated that demand remains constructive heading into the fourth quarter. The company expects fourth-quarter unit revenue growth of approximately 19% to 21%, supporting investor confidence in Southwest’s commercial initiatives. LUV Q3 earnings beat on record revenues
• Positive Sentiment: Some analysts remain constructive: JPMorgan lowered its price target modestly to $58 from $59 but maintained an “overweight” rating, implying substantial potential upside from recent levels.
• Neutral Sentiment: Analyst opinion is mixed: Susquehanna reduced its target to $43 from $45, while Wells Fargo initiated or reiterated a “hold” rating. This suggests analysts recognize the operational improvement but remain cautious about fuel costs and profitability.
• Negative Sentiment: Profit guidance was cut: Southwest expects full-year 2026 adjusted EPS of $2.60 to $2.85, versus a consensus estimate of $2.85. Fourth-quarter adjusted EPS guidance of $0.55 to $0.80 is also below the $0.88 consensus estimate. Southwest cuts 2026 profit forecast
• Negative Sentiment: Fuel costs are the key risk: Third-quarter fuel expense increased by $821 million, and management is planning for elevated jet-fuel prices to persist into 2027. Higher costs could limit margin expansion even if fares and demand remain strong. US airlines face fuel cost pressure

Southwest Airlines Company Profile

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.