Zacks Research Issues Pessimistic Outlook for LUV Earnings

Southwest Airlines Co. (NYSE:LUV - Free Report) - Equities researchers at Zacks Research dropped their Q2 2026 EPS estimates for shares of Southwest Airlines in a note issued to investors on Wednesday, May 6th. Zacks Research analyst Team now expects that the airline will post earnings per share of $0.57 for the quarter, down from their prior forecast of $1.29. 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' Q3 2026 earnings at $0.58 EPS, FY2026 earnings at $2.75 EPS, Q1 2027 earnings at $0.66 EPS, Q3 2027 earnings at $1.01 EPS, Q1 2028 earnings at $1.23 EPS and FY2028 earnings at $5.70 EPS.

A number of other equities research analysts have also recently commented on LUV. BMO Capital Markets dropped their price objective on shares of Southwest Airlines from $57.50 to $45.00 and set an "outperform" rating on the stock in a research note on Tuesday, March 31st. JPMorgan Chase & Co. dropped their price objective on shares of Southwest Airlines from $58.00 to $56.00 in a research note on Friday, March 27th. Susquehanna decreased their target price on Southwest Airlines from $55.00 to $42.00 and set a "neutral" rating on the stock in a research report on Thursday, April 2nd. Wall Street Zen cut shares of Southwest Airlines from a "buy" rating to a "hold" rating in a research note on Saturday, March 14th. Finally, Morgan Stanley lifted their price target on shares of Southwest Airlines from $50.00 to $55.00 and gave the company an "overweight" rating in a research note on Friday, January 30th. Nine investment analysts have rated the stock with a Buy rating, nine have given a Hold rating and four have issued a Sell rating to the stock. Based on data from MarketBeat, Southwest Airlines has a consensus rating of "Hold" and a consensus target price of $44.11.

Southwest Airlines Price Performance

Shares of NYSE LUV opened at $41.35 on Friday. The stock has a market capitalization of $20.21 billion, a price-to-earnings ratio of 26.68, a PEG ratio of 0.44 and a beta of 1.12. Southwest Airlines has a 12 month low of $28.98 and a 12 month high of $55.11. The firm's 50 day simple moving average is $40.90 and its 200-day simple moving average is $40.61. The company has a debt-to-equity ratio of 0.66, a current ratio of 0.48 and a quick ratio of 0.41.

Southwest Airlines (NYSE:LUV - Get Free Report) last issued its quarterly earnings data on Wednesday, April 22nd. The airline reported $0.45 EPS for the quarter, hitting analysts' consensus estimates 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 business's revenue was up 12.8% on a year-over-year basis. During the same quarter last year, the company earned ($0.13) EPS. Southwest Airlines has set its Q2 2026 guidance at 0.350-0.650 EPS.

Southwest Airlines Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, July 2nd. Investors of record on Thursday, June 11th will be paid a $0.18 dividend. The ex-dividend date of this dividend is Thursday, June 11th. This represents a $0.72 dividend on an annualized basis and a yield of 1.7%. Southwest Airlines's dividend payout ratio (DPR) is currently 46.45%.

Institutional Investors Weigh In On Southwest Airlines

A number of institutional investors have recently added to or reduced their stakes in LUV. AQR Capital Management LLC grew its stake in Southwest Airlines by 100.6% in the 1st quarter. AQR Capital Management LLC now owns 39,347 shares of the airline's stock valued at $1,303,000 after acquiring an additional 19,729 shares during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. lifted its holdings 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 valued at $2,050,000 after purchasing an additional 3,141 shares in the last quarter. Empowered Funds LLC lifted its holdings in Southwest Airlines by 7.6% in the 1st quarter. Empowered Funds LLC now owns 7,459 shares of the airline's stock valued at $250,000 after purchasing an additional 527 shares in the last quarter. EverSource Wealth Advisors LLC lifted its holdings in Southwest Airlines by 73.4% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 5,690 shares of the airline's stock valued at $185,000 after purchasing an additional 2,408 shares in the last quarter. Finally, First Trust Advisors LP lifted its holdings in Southwest Airlines by 47.4% in the 2nd quarter. First Trust Advisors LP now owns 307,602 shares of the airline's stock valued at $9,979,000 after purchasing an additional 98,986 shares in the last quarter. Institutional investors and hedge funds own 80.82% of the company's stock.

Key Stories Impacting Southwest Airlines

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

• Positive Sentiment: Board approved a cash dividend of $0.18 per share (record June 11; payable July 2) — a return of capital that supports income-oriented holders and signals board confidence in cash flow. Article Title
• Positive Sentiment: Southwest was ranked #1 by J.D. Power for customer satisfaction among economy travelers for the fifth straight year — a reputational win that supports demand, retention and potential pricing power. Article Title
• Neutral Sentiment: Feature on durable, income-oriented investing referencing Buffett’s “kamikaze pricing” is general market color on investor preferences (not specific to Southwest fundamentals). Useful context for income-seeking shareholders but unlikely to move LUV alone. Article Title
• Negative Sentiment: Zacks cut Q4 2026/Q2 2027/Q4 2027 and FY2027 EPS estimates and maintained a "Hold" rating — downward revisions to analyst forecasts can pressure the stock multiple and signal weaker near-term profit expectations. Article Title
• Negative Sentiment: U.S. airlines’ March jet fuel costs jumped >50% month-over-month after the Iran conflict, adding meaningful unplanned expense for carriers; higher fuel costs compress margins unless passed to consumers. Article Title
• Negative Sentiment: Industry-wide schedule cuts (75,000+ summer flights removed) reflect airlines trimming capacity in response to soaring fuel prices — potential revenue disruption, ticketing churn, and operational complexity for carriers including Southwest. Article Title

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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