Kercheville Advisors LLC Grows Position in Southwest Airlines Co. $LUV

Key Points

• Kercheville Advisors LLC boosted its stake in Southwest Airlines by 111.7% in Q4, adding 68,350 shares to hold 129,524 shares worth $5.497 million (about 1.6% of its portfolio and its 20th-largest position).
• Southwest reported Q1 EPS of $0.45 (in line with estimates) and revenue of $7.25 billion, and set Q2 adjusted EPS guidance of $0.35–$0.65 with the midpoint below Street estimates.
• Analyst reactions are mixed—nine Buy, nine Hold and four Sell (consensus "Hold", $44.31 target)—with some firms raising targets after Q1 but surging jet fuel costs flagged as a material near-term risk.

Kercheville Advisors LLC increased its holdings in Southwest Airlines Co. (NYSE:LUV - Free Report) by 111.7% in the fourth quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The firm owned 129,524 shares of the airline's stock after acquiring an additional 68,350 shares during the quarter. Southwest Airlines makes up about 1.6% of Kercheville Advisors LLC's investment portfolio, making the stock its 20th largest position. Kercheville Advisors LLC's holdings in Southwest Airlines were worth $5,497,000 at the end of the most recent quarter.

Other hedge funds also recently added to or reduced their stakes in the company. GHP Investment Advisors Inc. purchased a new stake in Southwest Airlines in the fourth quarter worth about $26,000. Optima Capital LLC purchased a new stake in shares of Southwest Airlines during the fourth quarter valued at about $27,000. Lodestone Wealth Management LLC purchased a new stake in shares of Southwest Airlines during the fourth quarter valued at about $29,000. Flagship Harbor Advisors LLC purchased a new stake in shares of Southwest Airlines during the fourth quarter valued at about $35,000. Finally, Richards Merrill & Peterson Inc. purchased a new stake in shares of Southwest Airlines during the fourth quarter valued at about $35,000. 80.82% of the stock is owned by hedge funds and other institutional investors.

Southwest Airlines Stock Performance

LUV opened at $39.46 on Friday. Southwest Airlines Co. has a 52-week low of $25.89 and a 52-week high of $55.11. The company has a quick ratio of 0.45, a current ratio of 0.48 and a debt-to-equity ratio of 0.66. The company has a market cap of $19.38 billion, a P/E ratio of 25.46, a price-to-earnings-growth ratio of 0.43 and a beta of 1.19. The firm's 50-day moving average price is $42.72 and its 200-day moving average price is $40.19.

Southwest Airlines (NYSE:LUV - Get Free Report) last posted its quarterly earnings results on Wednesday, April 22nd. The airline reported $0.45 earnings per share (EPS) for the quarter, hitting analysts' consensus estimates of $0.45. Southwest Airlines had a net margin of 2.83% and a return on equity of 10.66%. The company had revenue of $7.25 billion during the quarter, compared to analyst estimates of $8.46 billion. During the same period last year, the firm posted ($0.13) EPS. Southwest Airlines's revenue for the quarter was up 12.8% compared to the same quarter last year. Southwest Airlines has set its Q2 2026 guidance at 0.350-0.650 EPS. As a group, equities analysts anticipate that Southwest Airlines Co. will post 2.71 EPS for the current fiscal year.

Southwest Airlines Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Thursday, April 2nd. Shareholders of record on Thursday, March 12th were given a dividend of $0.18 per share. The ex-dividend date of this dividend was Thursday, March 12th. This represents a $0.72 dividend on an annualized basis and a yield of 1.8%. Southwest Airlines's dividend payout ratio (DPR) is currently 85.71%.

Analyst Upgrades and Downgrades

Several analysts have commented on the stock. JPMorgan Chase & Co. decreased their price target on shares of Southwest Airlines from $58.00 to $56.00 in a research report on Friday, March 27th. UBS Group decreased their price target on shares of Southwest Airlines from $59.00 to $56.00 and set a "buy" rating for the company in a research report on Monday, March 23rd. BNP Paribas Exane increased their price target on shares of Southwest Airlines from $24.00 to $33.00 and gave the company an "underperform" rating in a research report on Tuesday. The Goldman Sachs Group decreased their price target on shares of Southwest Airlines from $32.00 to $30.00 and set a "sell" rating for the company in a research report on Wednesday, April 1st. Finally, Weiss Ratings restated a "hold (c)" rating on shares of Southwest Airlines in a report on Friday, March 27th. Nine research analysts have rated the stock with a Buy rating, nine have issued a Hold rating and four have given a Sell rating to the company's stock. According to data from MarketBeat, the company currently has a consensus rating of "Hold" and a consensus target price of $44.31.

Key Southwest Airlines News

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

• Positive Sentiment: Raymond James raised its price target to $55 and kept an Outperform rating, citing margin strength — a bullish analyst action that likely supported the stock. Raymond James raises Southwest stock price target
• Positive Sentiment: Evercore nudged its target higher to $44, and several reports note other firms (and some analysts aggregated by Benzinga) have lifted their forecasts after Q1 — signaling improving analyst confidence in longer‑term recovery. Evercore adjusts price target
• Positive Sentiment: Q1 revenue topped estimates (record quarterly revenue reported), which investors viewed as evidence that the company’s initiatives are driving higher unit revenue. Zacks: Q1 revenue beat
• Neutral Sentiment: Q1 results were mixed: EPS roughly met consensus ($0.45) while revenue beat — a near-term neutral read that keeps investor focus on guidance and fuel trends. Q1 earnings snapshot
• Neutral Sentiment: Management’s earnings call highlighted progress from recent initiatives but reiterated exposure to jet fuel; the transcript provides detail for investors assessing execution vs. cost risk. Earnings call transcript
• Negative Sentiment: Southwest set Q2 adjusted EPS guidance with a midpoint below Street estimates and said updating FY guidance wouldn’t be productive amid macro uncertainty — a clear near‑term negative and the main reason some traders sold into the print. Analysts boost forecasts following Q1
• Negative Sentiment: Surging jet fuel costs are flagged as a material risk that could put full‑year guidance at risk — this cost pressure is cited across media and is weighing on near‑term profitability expectations. Fuel costs risk
• Negative Sentiment: Some analysts trimmed targets or gave cautious ratings (Argus cut its target to $45 from $55; HSBC moved to Hold with a $36.10 target), reflecting mixed views that can cap upside. Argus adjusts price target

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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