Citigroup Has Lowered Expectations for Southwest Airlines (NYSE:LUV) Stock Price

Key Points

• Citigroup cut its price target on Southwest from $54 to $44 and maintained a "neutral" rating, implying about an 11.85% upside from the stock's current price.
• Analyst coverage is mixed with an average rating of "Hold" and an average price target of $46.42 after several brokerages both lowered and raised targets (e.g., Wells Fargo cut to $44 while Barclays raised to $56).
• Shares fell roughly 3.8% to $39.34 on the day; Southwest reported a slight EPS beat ($0.58 vs. $0.56) but missed on revenue, and trades at a high P/E (~46.9) with a market cap near $19.3B.

Southwest Airlines (NYSE:LUV - Get Free Report) had its price objective lowered by equities researchers at Citigroup from $54.00 to $44.00 in a research note issued to investors on Friday,Benzinga reports. The brokerage currently has a "neutral" rating on the airline's stock. Citigroup's target price would indicate a potential upside of 11.85% from the company's current price.

LUV has been the subject of several other research reports. Wall Street Zen cut shares of Southwest Airlines from a "buy" rating to a "hold" rating in a research report on Saturday, March 14th. Wells Fargo & Company decreased their target price on Southwest Airlines from $50.00 to $44.00 and set an "equal weight" rating for the company in a research report on Monday. Barclays upgraded Southwest Airlines from an "equal weight" rating to an "overweight" rating and raised their target price for the company from $34.00 to $56.00 in a research note on Tuesday, December 16th. Bank of America raised their price objective on Southwest Airlines from $37.00 to $42.00 and gave the company an "underperform" rating in a research report on Friday, January 30th. Finally, Jefferies Financial Group decreased their price target on shares of Southwest Airlines from $48.00 to $41.00 and set a "hold" rating for the company in a research note on Thursday, March 12th. Eight analysts have rated the stock with a Buy rating, eight have given a Hold rating and four have given a Sell rating to the company. According to data from MarketBeat, the stock presently has an average rating of "Hold" and an average price target of $46.42.

Southwest Airlines Stock Down 3.8%

LUV stock traded down $1.53 during trading on Friday, reaching $39.34. The stock had a trading volume of 4,725,740 shares, compared to its average volume of 10,396,999. Southwest Airlines has a one year low of $23.82 and a one year high of $55.11. The company's 50 day moving average is $46.51 and its two-hundred day moving average is $38.87. The company has a market capitalization of $19.33 billion, a price-to-earnings ratio of 46.94, a P/E/G ratio of 0.29 and a beta of 1.10. The company has a quick ratio of 0.45, a current ratio of 0.52 and a debt-to-equity ratio of 0.57.

Southwest Airlines (NYSE:LUV - Get Free Report) last released its earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.56 by $0.02. The business had revenue of $7.44 billion during the quarter, compared to the consensus estimate of $7.51 billion. Southwest Airlines had a return on equity of 6.18% and a net margin of 1.57%.The business's revenue for the quarter was up 7.4% on a year-over-year basis. During the same period last year, the business posted $0.56 earnings per share. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. Equities research analysts forecast that Southwest Airlines will post 1.55 EPS for the current year.

Hedge Funds Weigh In On Southwest Airlines

Several hedge funds have recently modified their holdings of LUV. SHP Wealth Management bought a new stake in shares of Southwest Airlines during the fourth quarter valued at approximately $25,000. GHP Investment Advisors Inc. purchased a new stake in shares of Southwest Airlines during the fourth quarter worth about $26,000. Entrust Financial LLC acquired a new position in Southwest Airlines during the 4th quarter valued at approximately $26,000. Los Angeles Capital Management LLC acquired a new position in shares of Southwest Airlines in the 4th quarter valued at $26,000. Finally, Optima Capital LLC purchased a new position in shares of Southwest Airlines in the fourth quarter worth about $27,000. Hedge funds and other institutional investors own 80.82% of the company's stock.

About Southwest Airlines

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.

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