Southwest Airlines (NYSE:LUV) Raised to Hold at HSBC

Key Points

• HSBC upgraded Southwest from "reduce" to "hold" and raised its price target to $36.10 (from $24.40), a level that implies roughly a 4.5% downside from the prior close.
• Analyst views remain mixed — 8 Buys, 9 Holds and 4 Sells — leaving a consensus rating of Hold and a consensus price target of $43.79, notably above HSBC's new target.
• Southwest's Q1 results showed EPS of $0.45 (in line) and revenue of $7.25B (below expectations), with Q2 guidance of $0.35–0.65 and management warning that rising jet‑fuel costs pose a key near‑term risk.

Southwest Airlines (NYSE:LUV - Get Free Report) was upgraded by equities research analysts at HSBC from a "reduce" rating to a "hold" rating in a research report issued to clients and investors on Friday,Benzinga reports. The brokerage presently has a $36.10 target price on the airline's stock, up from their previous target price of $24.40. HSBC's price target would suggest a potential downside of 4.47% from the company's previous close.

Several other analysts also recently weighed in on the stock. JPMorgan Chase & Co. reduced their price objective on shares of Southwest Airlines from $58.00 to $56.00 in a research report on Friday, March 27th. TD Cowen reduced their price objective on shares of Southwest Airlines from $56.00 to $46.00 and set a "buy" rating for the company in a research report on Thursday, April 2nd. Zacks Research downgraded shares of Southwest Airlines from a "strong-buy" rating to a "hold" rating in a research report on Wednesday, March 11th. Rothschild & Co Redburn upped their price target on shares of Southwest Airlines from $27.00 to $35.00 and gave the company a "sell" rating in a research report on Thursday, March 5th. Finally, Evercore upped their price target on shares of Southwest Airlines from $40.00 to $45.00 and gave the company an "in-line" rating in a research report on Thursday, January 29th. Eight analysts have rated the stock with a Buy rating, nine have given a Hold rating and four have given a Sell rating to the company's stock. Based on data from MarketBeat.com, Southwest Airlines presently has a consensus rating of "Hold" and a consensus price target of $43.79.

Southwest Airlines Stock Down 4.0%

Shares of NYSE:LUV opened at $37.79 on Friday. The company has a market capitalization of $18.56 billion, a PE ratio of 24.38, a P/E/G ratio of 0.44 and a beta of 1.19. The company has a current ratio of 0.52, a quick ratio of 0.45 and a debt-to-equity ratio of 0.57. Southwest Airlines has a twelve month low of $24.63 and a twelve month high of $55.11. The firm has a 50 day simple moving average of $42.96 and a 200-day simple moving average of $40.14.

Southwest Airlines (NYSE:LUV - Get Free Report) last issued its quarterly earnings data on Wednesday, April 22nd. The airline reported $0.45 earnings per share for the quarter, hitting the consensus estimate of $0.45. The business had revenue of $7.25 billion during the quarter, compared to the consensus estimate of $8.46 billion. Southwest Airlines had a net margin of 2.83% and a return on equity of 10.30%. The company's revenue was up 12.8% compared to the same quarter last year. During the same quarter in the previous year, the firm earned ($0.13) EPS. Southwest Airlines has set its Q2 2026 guidance at 0.350-0.650 EPS. On average, equities analysts predict that Southwest Airlines will post 2.72 EPS for the current fiscal year.

Institutional Trading of Southwest Airlines

Several institutional investors and hedge funds have recently bought and sold shares of LUV. iA Global Asset Management Inc. increased its stake in Southwest Airlines by 300.8% in the 1st quarter. iA Global Asset Management Inc. now owns 15,404 shares of the airline's stock valued at $579,000 after buying an additional 11,561 shares during the period. Caliber Wealth Management LLC KS increased its stake in Southwest Airlines by 52.9% in the 1st quarter. Caliber Wealth Management LLC KS now owns 18,258 shares of the airline's stock valued at $686,000 after buying an additional 6,320 shares during the period. SageGuard Financial Group LLC acquired a new position in Southwest Airlines in the 1st quarter valued at $1,150,000. Apollon Wealth Management LLC acquired a new position in Southwest Airlines in the 1st quarter valued at $239,000. Finally, Patton Fund Management Inc. increased its stake in Southwest Airlines by 1,283.8% in the 1st quarter. Patton Fund Management Inc. now owns 86,047 shares of the airline's stock valued at $3,233,000 after buying an additional 79,829 shares during the period. Hedge funds and other institutional investors own 80.82% of the company's stock.

More Southwest Airlines News

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

• Positive Sentiment: Management says its transformation initiatives are in place and drove margin expansion, record first‑quarter revenues and improved operating performance — a structural improvement investors can model into future margins. Read More.
• Positive Sentiment: Raymond James raised its price target, citing stronger-than-expected margin performance from the transformation and higher unit revenues — a sign some analysts view the company’s strategy as working despite headwinds. Read More.
• Neutral Sentiment: Q1 results: EPS of $0.45 met consensus and the company reported $7.25B in revenue (year‑over‑year revenue growth), showing recovery in demand but only modest upside versus expectations. Read More.
• Neutral Sentiment: Analyst notes and transcripts: Earnings‑call transcripts and coverage highlight a turnaround in commercial execution while flagging key risks — useful for modeling scenarios but not a definitive buy/sell trigger. Read More.
• Negative Sentiment: Rising jet‑fuel costs are the dominant near‑term risk — management said higher fuel for the remainder of the year and warned that full‑year guidance is “at risk,” which increases forecast uncertainty and compresses margins. Read More.
• Negative Sentiment: Q2 guidance came in below some analysts’ expectations (EPS guide 0.35–0.65 with midpoint under consensus) and management said updating FY adjusted EPS isn’t productive amid macro/fuel uncertainty — a key reason the shares faded. Read More.
• Negative Sentiment: Multiple market writeups warn the stock may not be priced for a sustained fuel shock; headlines and broker notes are amplifying downside risk until fuel costs stabilize. Read More.

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.

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