Gradient Investments LLC Acquires 87,146 Shares of Southwest Airlines Co. $LUV

Key Points

• Gradient Investments increased its Southwest Airlines stake by 19.3%, purchasing 87,146 additional shares to reach 539,612 shares valued at approximately $27.7 million. Institutional investors collectively own 80.82% of LUV.
• Southwest reported quarterly EPS of $0.94, beating the $0.52 consensus estimate, while revenue rose 16.4% year over year to $8.72 billion. Zacks also raised several future EPS forecasts, although its rating remains Hold.
• Analyst sentiment is mixed, with price-target increases from Wells Fargo, Evercore and UBS; the stock has a consensus Hold rating and $49.55 target price. Southwest also declared a quarterly dividend of $0.18 per share, representing a 1.5% yield.

Gradient Investments LLC raised its holdings in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) by 19.3% in the second quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The fund owned 539,612 shares of the airline's stock after buying an additional 87,146 shares during the quarter. Gradient Investments LLC owned about 0.11% of Southwest Airlines worth $27,747,000 as of its most recent SEC filing.

Several other hedge funds also recently modified their holdings of LUV. North Dakota State Investment Board acquired a new stake in Southwest Airlines in the 4th quarter worth $2,189,000. Altfest L J & Co. Inc. acquired a new position in shares of Southwest Airlines during the fourth quarter valued at about $1,403,000. Mitsubishi UFJ Asset Management Co. Ltd. raised its position in shares of Southwest Airlines by 5.7% during the fourth quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 575,639 shares of the airline's stock valued at $23,774,000 after buying an additional 31,128 shares during the last quarter. Kercheville Advisors LLC lifted its stake in shares of Southwest Airlines by 111.7% in the fourth quarter. Kercheville Advisors LLC now owns 129,524 shares of the airline's stock valued at $5,497,000 after buying an additional 68,350 shares during the period. Finally, Strs Ohio lifted its stake in shares of Southwest Airlines by 250.1% in the fourth quarter. Strs Ohio now owns 39,437 shares of the airline's stock valued at $1,630,000 after buying an additional 28,172 shares during the period. 80.82% of the stock is owned by institutional investors.

Southwest Airlines News Summary

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

• Positive Sentiment: Zacks Research raised multiple EPS forecasts for Southwest. Estimates increased for Q3 2026 to $0.73 from $0.58, FY2026 to $3.29 from $2.75, FY2027 to $4.96 from $4.63, and FY2028 to $5.83 from $5.70. The upgrades suggest analysts see improving profitability over the next several years.
• Positive Sentiment: Zacks also lifted estimates for Q1 2027, Q3 2027, Q4 2026 and Q4 2027, reinforcing a generally improving earnings trajectory. However, the firm maintained its Hold rating, indicating that valuation or execution risks remain.
• Positive Sentiment: Southwest is offering a promotional Companion Pass that allows qualifying customers to bring a companion on eligible flights for $5, with unlimited use during the first two months of next year. The offer could support bookings and customer engagement, though its effect on revenue and margins is uncertain. Southwest Airlines Companion Pass promotion
• Neutral Sentiment: Southwest’s Compensation Committee approved higher executive pay to retain its leadership team. Retaining experienced executives may support the company’s ongoing strategy, but increased compensation also raises operating expenses and could draw investor scrutiny. Southwest Airlines Raises Executive Pay to Retain Leadership
• Negative Sentiment: A few longer-term Zacks revisions were slightly negative: Q2 2027 EPS was reduced to $1.16 from $1.22 and Q2 2028 EPS to $1.29 from $1.30. These minor cuts temper, but do not reverse, the broader pattern of upward earnings revisions.

Wall Street Analyst Weigh In

Several equities analysts recently issued reports on the company. Wells Fargo & Company boosted their price target on Southwest Airlines from $44.00 to $50.00 and gave the company an "equal weight" rating in a research note on Tuesday, June 30th. Evercore raised their price objective on Southwest Airlines from $44.00 to $52.00 in a research report on Thursday, June 25th. UBS Group lifted their price objective on Southwest Airlines from $53.00 to $61.00 and gave the stock a "buy" rating in a report on Tuesday, June 23rd. Zacks Research upgraded Southwest Airlines from a "strong sell" rating to a "hold" rating in a research report on Thursday, June 25th. Finally, Wall Street Zen upgraded Southwest Airlines from a "hold" rating to a "buy" rating in a research note on Sunday, July 5th. Nine equities research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and four have issued a Sell rating to the company's stock. According to data from MarketBeat, Southwest Airlines has a consensus rating of "Hold" and a consensus target price of $49.55.

Southwest Airlines Stock Performance

NYSE LUV opened at $46.97 on Friday. Southwest Airlines Co. has a twelve month low of $28.98 and a twelve month high of $55.11. The company has a quick ratio of 0.42, a current ratio of 0.49 and a debt-to-equity ratio of 0.54. The stock has a market cap of $22.98 billion, a P/E ratio of 28.82, a PEG ratio of 0.41 and a beta of 1.14. The company's 50-day simple moving average is $47.12 and its 200 day simple moving average is $44.53.

Southwest Airlines (NYSE:LUV - Get Free Report) last announced its quarterly earnings results on Wednesday, July 22nd. The airline reported $0.94 EPS for the quarter, topping analysts' consensus estimates of $0.52 by $0.42. The firm had revenue of $8.72 billion during the quarter, compared to analysts' expectations of $8.58 billion. Southwest Airlines had a net margin of 2.78% and a return on equity of 14.15%. The company's revenue for the quarter was up 16.4% compared to the same quarter last year. During the same quarter last year, the company earned $0.43 earnings per share. 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. As a group, research analysts forecast that Southwest Airlines Co. will post 3.45 earnings per share for the current fiscal year.

Southwest Airlines Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Thursday, September 24th. Investors of record on Thursday, September 3rd will be given a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a dividend yield of 1.5%. The ex-dividend date is Thursday, September 3rd. Southwest Airlines's dividend payout ratio (DPR) is 44.17%.

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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