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Zacks Research Issues Pessimistic Estimate for LUV Earnings

Southwest Airlines logo with Transportation background

Key Points

  • Zacks Research has revised its Q3 2025 earnings per share (EPS) estimate for Southwest Airlines (NYSE:LUV) down from $0.33 to $0.16, contributing to a consensus full-year earnings estimate of $1.55 per share.
  • Several brokerages have recently adjusted their ratings and price targets for Southwest Airlines, with Jefferies upgrading it to "hold" with a new price target of $33.00 and Evercore ISI lowering it to $34.00.
  • Southwest Airlines announced a share repurchase program allowing for $2.00 billion in repurchases, indicating management's belief that the stock is undervalued.
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Southwest Airlines Co. (NYSE:LUV - Free Report) - Analysts at Zacks Research cut their Q3 2025 EPS estimates for Southwest Airlines in a research report issued on Wednesday, August 6th. Zacks Research analyst S. Goswami now forecasts that the airline will earn $0.16 per share for the quarter, down from their previous forecast of $0.33. The consensus estimate for Southwest Airlines' current full-year earnings is $1.55 per share. Zacks Research also issued estimates for Southwest Airlines' FY2025 earnings at $1.04 EPS, Q2 2026 earnings at $0.78 EPS, Q3 2026 earnings at $0.19 EPS, FY2026 earnings at $2.31 EPS and FY2027 earnings at $3.91 EPS.

Several other brokerages have also recently weighed in on LUV. Jefferies Financial Group upgraded Southwest Airlines from an "underperform" rating to a "hold" rating and upped their price target for the company from $24.00 to $33.00 in a research report on Tuesday, May 27th. Evercore ISI decreased their price target on Southwest Airlines from $40.00 to $34.00 and set an "in-line" rating on the stock in a research report on Friday, July 25th. UBS Group upped their price target on Southwest Airlines from $27.00 to $34.00 and gave the company a "neutral" rating in a research report on Monday, July 7th. Wall Street Zen cut Southwest Airlines from a "hold" rating to a "sell" rating in a research report on Saturday, July 26th. Finally, Hsbc Global Res upgraded Southwest Airlines to a "moderate sell" rating in a research report on Thursday, July 24th. Seven investment analysts have rated the stock with a sell rating, nine have given a hold rating and four have assigned a buy rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of "Hold" and a consensus price target of $33.06.

Get Our Latest Report on Southwest Airlines

Southwest Airlines Trading Up 0.2%

Shares of LUV opened at $29.63 on Monday. The business's 50-day moving average price is $33.15 and its 200-day moving average price is $31.17. Southwest Airlines has a twelve month low of $23.82 and a twelve month high of $37.96. The stock has a market cap of $15.56 billion, a PE ratio of 44.89, a P/E/G ratio of 0.77 and a beta of 1.26. The company has a quick ratio of 0.49, a current ratio of 0.56 and a debt-to-equity ratio of 0.51.

Southwest Airlines (NYSE:LUV - Get Free Report) last released its quarterly earnings data on Wednesday, July 23rd. The airline reported $0.43 EPS for the quarter, missing the consensus estimate of $0.51 by ($0.08). The business had revenue of $7.24 billion for the quarter, compared to analysts' expectations of $7.30 billion. Southwest Airlines had a net margin of 1.43% and a return on equity of 6.27%. Southwest Airlines's revenue for the quarter was down 2.1% compared to the same quarter last year. During the same period last year, the company earned $0.58 earnings per share.

Institutional Trading of Southwest Airlines

A number of institutional investors and hedge funds have recently added to or reduced their stakes in LUV. Jacobs Levy Equity Management Inc. lifted its stake in Southwest Airlines by 66.0% in the fourth quarter. Jacobs Levy Equity Management Inc. now owns 6,014,828 shares of the airline's stock worth $202,219,000 after acquiring an additional 2,391,495 shares during the period. Alyeska Investment Group L.P. purchased a new stake in Southwest Airlines in the first quarter worth $56,244,000. Nuveen LLC purchased a new stake in Southwest Airlines in the first quarter worth $50,433,000. Raymond James Financial Inc. purchased a new stake in Southwest Airlines in the fourth quarter worth $40,541,000. Finally, Jefferies Financial Group Inc. lifted its stake in Southwest Airlines by 2,857.9% in the fourth quarter. Jefferies Financial Group Inc. now owns 1,013,657 shares of the airline's stock worth $34,079,000 after acquiring an additional 979,388 shares during the period. Hedge funds and other institutional investors own 80.82% of the company's stock.

Insider Buying and Selling

In related news, Director Gregg A. Saretsky acquired 3,345 shares of the company's stock in a transaction dated Wednesday, August 6th. The stock was purchased at an average price of $30.03 per share, with a total value of $100,450.35. Following the completion of the purchase, the director owned 23,644 shares in the company, valued at $710,029.32. This trade represents a 16.48% increase in their position. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director Sarah Feinberg acquired 1,500 shares of the company's stock in a transaction dated Tuesday, August 5th. The shares were bought at an average cost of $30.01 per share, with a total value of $45,015.00. Following the purchase, the director owned 14,229 shares of the company's stock, valued at approximately $427,012.29. This trade represents a 11.78% increase in their position. The disclosure for this purchase can be found here. 0.79% of the stock is owned by company insiders.

Southwest Airlines Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, September 24th. Shareholders of record on Wednesday, September 3rd will be given a dividend of $0.18 per share. This represents a $0.72 dividend on an annualized basis and a yield of 2.4%. The ex-dividend date is Wednesday, September 3rd. Southwest Airlines's dividend payout ratio (DPR) is presently 109.09%.

Southwest Airlines announced that its Board of Directors has approved a share repurchase program on Wednesday, July 23rd that allows the company to repurchase $2.00 billion in shares. This repurchase authorization allows the airline to buy up to 9.4% of its shares through open market purchases. Shares repurchase programs are usually a sign that the company's leadership believes its stock is undervalued.

Southwest Airlines Company Profile

(Get Free Report)

Southwest Airlines Co operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.

Further Reading

Earnings History and Estimates for Southwest Airlines (NYSE:LUV)

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest and most accurate reporting. This story was reviewed by MarketBeat's editorial team prior to publication. Please send any questions or comments about this story to contact@marketbeat.com.

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