Southwest Airlines (NYSE:LUV) Upgraded at Zacks Research

Key Points

• Zacks Research upgraded Southwest Airlines from “strong sell” to “hold” and issued earnings estimates of $2.85 per share for 2026, $3.71 for 2027, and $5.56 for 2028.
• Southwest reported quarterly EPS of $0.66, beating the $0.57 consensus, while revenue of $8.42 billion also topped estimates and rose 21.2% year over year.
• Analyst sentiment overall was “hold,” with 11 buy, nine hold, and three sell ratings and an average price target of $48.20; the stock was down 4.4% in Wednesday’s trading.

Southwest Airlines (NYSE:LUV - Get Free Report) was upgraded by research analysts at Zacks Research from a "strong sell" rating to a "hold" rating in a report released on Wednesday, Zacks reports. Zacks Research also issued estimates for Southwest Airlines' Q4 2026 earnings at $0.80 EPS, FY2026 earnings at $2.85 EPS, Q1 2027 earnings at $0.38 EPS, Q2 2027 earnings at $1.19 EPS, Q3 2027 earnings at $1.11 EPS, Q4 2027 earnings at $1.03 EPS, FY2027 earnings at $3.71 EPS, Q1 2028 earnings at $0.65 EPS, Q2 2028 earnings at $1.88 EPS, Q3 2028 earnings at $1.46 EPS and FY2028 earnings at $5.56 EPS.

Several other research analysts have also recently issued reports on the stock. Barclays cut their price target on shares of Southwest Airlines from $65.00 to $58.00 and set an "overweight" rating for the company in a report on Friday, September 11th. Citigroup reduced their price objective on Southwest Airlines from $55.00 to $50.00 and set a "neutral" rating for the company in a report on Friday, July 24th. Susquehanna decreased their target price on Southwest Airlines from $50.00 to $45.00 and set a "neutral" rating on the stock in a research report on Wednesday, October 7th. JPMorgan Chase & Co. lowered their target price on Southwest Airlines from $59.00 to $58.00 and set an "overweight" rating on the stock in a report on Friday, October 23rd. Finally, Raymond James Financial dropped their price target on Southwest Airlines from $60.00 to $54.00 and set an "outperform" rating for the company in a research report on Monday, August 24th. Eleven investment analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and three have given a Sell rating to the stock. Based on data from MarketBeat.com, Southwest Airlines has an average rating of "Hold" and an average price target of $48.20.

Southwest Airlines Stock Down 4.4%

LUV stock opened at $44.39 on Wednesday. Southwest Airlines has a 12 month low of $30.84 and a 12 month high of $55.11. The company has a debt-to-equity ratio of 0.51, a current ratio of 0.47 and a quick ratio of 0.40. The company has a market cap of $21.73 billion, a price-to-earnings ratio of 21.34, a price-to-earnings-growth ratio of 0.67 and a beta of 1.23. The company has a fifty day moving average price of $41.07 and a 200 day moving average price of $43.52.

Southwest Airlines (NYSE:LUV - Get Free Report) last posted its quarterly earnings data on Wednesday, October 21st. The airline reported $0.66 EPS for the quarter, beating analysts' consensus estimates of $0.57 by $0.09. The company had revenue of $8.42 billion for the quarter, compared to analyst estimates of $8.25 billion. Southwest Airlines had a net margin of 3.34% and a return on equity of 18.05%. Southwest Airlines's quarterly revenue was up 21.2% on a year-over-year basis. During the same period in the previous year, the business posted $0.11 earnings per share. Sell-side analysts expect that Southwest Airlines will post 2.77 earnings per share for the current year.

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the business. Primecap Management Co. CA purchased a new stake in shares of Southwest Airlines during the second quarter worth $2,509,179,000. BlackRock Inc. purchased a new position in Southwest Airlines in the second quarter valued at about $1,538,382,000. Dimensional Fund Advisors LP grew its stake in Southwest Airlines by 2.1% in the first quarter. Dimensional Fund Advisors LP now owns 5,763,154 shares of the airline's stock valued at $216,472,000 after purchasing an additional 117,833 shares in the last quarter. Bank of New York Mellon Corp purchased a new position in Southwest Airlines in the second quarter valued at about $234,872,000. Finally, U S Global Investors Inc. increased its position 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 worth $94,141,000 after purchasing an additional 275,204 shares during the last quarter. 80.82% of the stock is owned by hedge funds and other institutional investors.

Southwest Airlines News Summary

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

• Positive Sentiment: Zacks Research raised its 2028 EPS estimates for Q2 to $1.88 from $1.29 and Q3 to $1.46 from $1.07, signaling improved expectations for those quarters. Southwest Airlines analyst estimates
• Neutral Sentiment: An article points to falling oil prices as a potential tailwind for travel companies through lower fuel costs. The effect on Southwest was not quantified in the article. 3 Consumer And Travel Stocks To Watch As Oil Falls And The Dollar Softens
• Negative Sentiment: Zacks cut its full-year EPS forecasts to $2.85 for 2026 from $3.31, $3.71 for 2027 from $5.02, and $5.56 for 2028 from $5.90. It also reduced estimates for Q4 2026, Q1 2027, Q4 2027, and Q1 2028. The broad downward revisions—and Zacks’ “Strong Sell” rating—suggest weaker earnings expectations, despite the increases to Q2 and Q3 2028 forecasts. Southwest Airlines analyst estimates

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.

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