Zacks Research Issues Pessimistic Outlook for LUV Earnings

Key Points

• Zacks Research cut its Q4 2026 EPS estimate for Southwest to $1.15 (from $1.36) and maintains a Hold rating, while projecting FY2027 EPS of $4.63.
• Southwest's most recent quarter delivered $0.45 EPS (in line) but missed revenue expectations at $7.25B versus $8.46B, and the company guided Q2 2026 EPS to $0.35–$0.65.
• Several brokerages have trimmed price targets, leaving a consensus average target of $44.11; the stock trades near $41.51 and institutional investors (hedge funds) own about 80.82% of the shares.

Southwest Airlines Co. (NYSE:LUV - Free Report) - Stock analysts at Zacks Research reduced their Q4 2026 earnings estimates for Southwest Airlines in a research note issued on Wednesday, May 6th. Zacks Research analyst Team now expects that the airline will post earnings per share of $1.15 for the quarter, down from their previous estimate of $1.36. Zacks Research currently has a "Hold" rating on the stock. The consensus estimate for Southwest Airlines' current full-year earnings is $2.90 per share. Zacks Research also issued estimates for Southwest Airlines' Q2 2027 earnings at $1.22 EPS, Q4 2027 earnings at $1.74 EPS and FY2027 earnings at $4.63 EPS.

Southwest Airlines (NYSE:LUV - Get Free Report) last released its quarterly earnings results on Wednesday, April 22nd. The airline reported $0.45 earnings per share for the quarter, meeting the consensus estimate of $0.45. The business had revenue of $7.25 billion for the quarter, compared to analysts' expectations of $8.46 billion. Southwest Airlines had a net margin of 2.83% and a return on equity of 10.66%. The firm's revenue for the quarter was up 12.8% compared to the same quarter last year. During the same quarter in the previous year, the business posted ($0.13) earnings per share. Southwest Airlines has set its Q2 2026 guidance at 0.350-0.650 EPS.

LUV has been the topic of several other research reports. Wells Fargo & Company cut their price target on shares of Southwest Airlines from $50.00 to $44.00 and set an "equal weight" rating on the stock in a report on Monday, March 16th. Bank of America lowered their price objective on Southwest Airlines from $42.00 to $40.00 and set an "underperform" rating for the company in a research report on Wednesday, April 1st. BMO Capital Markets lowered their price objective on Southwest Airlines from $57.50 to $45.00 and set an "outperform" rating for the company in a research report on Tuesday, March 31st. Jefferies Financial Group lowered their price objective on Southwest Airlines from $42.00 to $37.00 and set a "hold" rating for the company in a research report on Monday, April 27th. Finally, Raymond James Financial raised their price objective on Southwest Airlines from $45.00 to $55.00 and gave the company an "outperform" rating in a research report on Friday, April 24th. Nine investment analysts have rated the stock with a Buy rating, nine have issued a Hold rating and four have assigned a Sell rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of "Hold" and an average price target of $44.11.

Southwest Airlines Stock Performance

NYSE:LUV opened at $41.51 on Thursday. The stock has a market cap of $20.29 billion, a P/E ratio of 26.78, a price-to-earnings-growth ratio of 0.42 and a beta of 1.12. The firm's fifty day simple moving average is $41.08 and its 200 day simple moving average is $40.56. Southwest Airlines has a twelve month low of $28.98 and a twelve month high of $55.11. The company has a quick ratio of 0.41, a current ratio of 0.48 and a debt-to-equity ratio of 0.66.

Hedge Funds Weigh In On Southwest Airlines

Large investors have recently modified their holdings of the stock. AQR Capital Management LLC raised its position in Southwest Airlines by 100.6% in the 1st quarter. AQR Capital Management LLC now owns 39,347 shares of the airline's stock worth $1,303,000 after buying an additional 19,729 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its position in Southwest Airlines by 5.4% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 61,060 shares of the airline's stock worth $2,050,000 after buying an additional 3,141 shares during the last quarter. Empowered Funds LLC raised its position in Southwest Airlines by 7.6% in the 1st quarter. Empowered Funds LLC now owns 7,459 shares of the airline's stock worth $250,000 after buying an additional 527 shares during the last quarter. EverSource Wealth Advisors LLC raised its position in Southwest Airlines by 73.4% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 5,690 shares of the airline's stock worth $185,000 after buying an additional 2,408 shares during the last quarter. Finally, First Trust Advisors LP raised its position in Southwest Airlines by 47.4% in the 2nd quarter. First Trust Advisors LP now owns 307,602 shares of the airline's stock worth $9,979,000 after buying an additional 98,986 shares during the last quarter. 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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