Citigroup Cuts Southwest Airlines (NYSE:LUV) Price Target to $50.00

Key Points

• Citigroup cut its price target on Southwest Airlines from $55 to $50, while keeping a neutral rating on the stock. The new target still implies about 11.7% upside from the previous close.
• Southwest recently reported a strong quarterly earnings beat, posting $0.94 EPS on revenue of $8.72 billion, both above analyst expectations. Revenue rose 16.4% year over year.
• Despite the earnings beat, investors are focused on a softer outlook: Southwest guided Q3 EPS below Wall Street estimates and reportedly cut its full-year outlook amid rising fuel costs.

Southwest Airlines (NYSE:LUV - Get Free Report) had its target price cut by investment analysts at Citigroup from $55.00 to $50.00 in a report issued on Friday,Benzinga reports. The brokerage presently has a "neutral" rating on the airline's stock. Citigroup's target price indicates a potential upside of 11.74% from the stock's previous close.

A number of other analysts have also recently commented on the stock. TD Cowen upped their price target on shares of Southwest Airlines from $47.00 to $53.00 and gave the company a "buy" rating in a research note on Thursday, July 2nd. JPMorgan Chase & Co. dropped their target price on Southwest Airlines from $58.00 to $56.00 in a research report on Friday, March 27th. BMO Capital Markets boosted their price objective on Southwest Airlines from $45.00 to $58.50 and gave the company an "outperform" rating in a research note on Thursday, July 2nd. Evercore boosted their price objective on Southwest Airlines from $44.00 to $52.00 in a research note on Thursday, June 25th. Finally, The Goldman Sachs Group increased their price objective on Southwest Airlines from $30.00 to $35.00 and gave the stock a "sell" rating in a report on Thursday, July 2nd. Nine analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and four have assigned a Sell rating to the company's stock. According to data from MarketBeat, the company presently has an average rating of "Hold" and a consensus target price of $49.33.

Southwest Airlines Stock Performance

Southwest Airlines stock opened at $44.75 on Friday. The company has a market capitalization of $21.87 billion, a P/E ratio of 27.45, a P/E/G ratio of 0.45 and a beta of 1.12. Southwest Airlines has a 1 year low of $28.98 and a 1 year high of $55.11. The company has a debt-to-equity ratio of 0.66, a current ratio of 0.48 and a quick ratio of 0.41. The business has a 50 day moving average of $45.88 and a 200-day moving average of $44.29.

Southwest Airlines (NYSE:LUV - Get Free Report) last released its earnings results on Wednesday, July 22nd. The airline reported $0.94 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.52 by $0.42. The company had revenue of $8.72 billion for the quarter, compared to the consensus estimate of $8.58 billion. Southwest Airlines had a net margin of 2.78% and a return on equity of 13.93%. Southwest Airlines's quarterly revenue was up 16.4% compared to the same quarter last year. During the same quarter in the previous year, the company earned $0.43 EPS. Southwest Airlines has set its FY 2026 guidance at 3.250-4.250 EPS and its Q3 2026 guidance at 0.500-0.750 EPS. On average, equities research analysts predict that Southwest Airlines will post 3.23 earnings per share for the current year.

Institutional Investors Weigh In On Southwest Airlines

Several hedge funds and other institutional investors have recently added to or reduced their stakes in LUV. MCF Advisors LLC increased its stake in Southwest Airlines by 28.5% during the 4th quarter. MCF Advisors LLC now owns 915 shares of the airline's stock worth $38,000 after buying an additional 203 shares during the period. World Investment Advisors grew its stake in Southwest Airlines by 1.0% during the 4th quarter. World Investment Advisors now owns 21,148 shares of the airline's stock valued at $843,000 after purchasing an additional 210 shares in the last quarter. Parkside Financial Bank & Trust grew its stake in Southwest Airlines by 7.5% during the 4th quarter. Parkside Financial Bank & Trust now owns 3,063 shares of the airline's stock valued at $127,000 after purchasing an additional 213 shares in the last quarter. Annis Gardner Whiting Capital Advisors LLC increased its holdings in Southwest Airlines by 1.5% during the 4th quarter. Annis Gardner Whiting Capital Advisors LLC now owns 16,437 shares of the airline's stock worth $682,000 after purchasing an additional 235 shares during the last quarter. Finally, Transcend Capital Advisors LLC increased its holdings in Southwest Airlines by 4.2% during the 4th quarter. Transcend Capital Advisors LLC now owns 6,726 shares of the airline's stock worth $278,000 after purchasing an additional 272 shares during the last quarter. 80.82% of the stock is owned by hedge funds and other institutional investors.

Trending Headlines about Southwest Airlines

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

• Positive Sentiment: Southwest beat Q2 expectations with adjusted EPS of $0.94 versus $0.52 consensus, and revenue of $8.72 billion topped estimates, supported by record quarterly revenue, higher fares, and margin expansion. Southwest Airlines Reports Second Quarter 2026 Results; Earnings Power on Full Display
• Positive Sentiment: The company said its full-year EPS guide of $3.25 to $4.25 remains above the recent analyst consensus, suggesting improved earnings power despite cost pressure. Southwest Airlines Reports Second Quarter 2026 Results; Earnings Power on Full Display
• Neutral Sentiment: Southwest also highlighted transformational initiatives, broad demand strength, and strong Customer engagement, which support the long-term operating story. Southwest Airlines Co (LUV) Q2 2026 Earnings Call Highlights
• Neutral Sentiment: Analysts and media coverage noted that airlines are dealing with volatile jet fuel prices, which are becoming a moving target for earnings forecasts across the sector. Fuel Swings Turn US Airline Earnings Forecasts Into Moving Targets
• Negative Sentiment: Investors are reacting to a softer Q3 outlook: Southwest guided third-quarter EPS to $0.50 to $0.75, below Wall Street’s expectation, while fuel costs rose by roughly $889 million. Southwest Airlines Profit Jumps 9% as Passengers Pick Up Fuel Tab, but Third-Quarter Forecast Falls Short
• Negative Sentiment: Southwest cut its full-year outlook, with fuel expense pressures and weaker near-term profit expectations overshadowing the earnings beat. Southwest Cuts Full-Year Outlook as Fuel Expenses Weigh on Second-Quarter Profit

Southwest Airlines Company Profile

Southwest Airlines Co is a U.S.-based low-cost carrier that operates a point-to-point domestic and near-international airline network. Headquartered in Dallas, Texas, the company primarily flies Boeing 737 aircraft and offers no-frills, single-class service designed to keep fares competitive. Southwest's operating model emphasizes high aircraft utilization, quick turnaround times and an open seating policy, allowing customers to board and select seats on a first-come, first-served basis.

Founded in 1967 by Herb Kelleher and Rollin King as Air Southwest Company, Southwest began commercial service in 1971, initially connecting Dallas, Houston and San Antonio.

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.