Zacks Research Issues Positive Forecast for LUV Earnings

Key Points

• Zacks Research raised Southwest Airlines’ Q3 2026 EPS forecast to $0.73 from $0.58, while maintaining a “Hold” rating. Its estimates include $3.29 EPS for fiscal 2026 and $4.96 for fiscal 2027.
• Southwest recently reported Q2 EPS of $0.94, beating the $0.52 consensus, while revenue rose 16.4% year over year to $8.72 billion. The company provided FY 2026 EPS guidance of $3.25–$4.25.
• Analyst sentiment remains mixed, with an average “Hold” rating and a $49.55 price target; the stock opened at $46.93. Southwest also declared a quarterly dividend of $0.18, implying a 1.5% annualized yield.

Southwest Airlines Co. (NYSE:LUV - Free Report) - Zacks Research increased their Q3 2026 earnings estimates for shares of Southwest Airlines in a report released on Wednesday, August 5th. Zacks Research analyst Team now anticipates that the airline will post earnings of $0.73 per share for the quarter, up from their previous estimate of $0.58. Zacks Research has a "Hold" rating on the stock. The consensus estimate for Southwest Airlines' current full-year earnings is $3.47 per share. Zacks Research also issued estimates for Southwest Airlines' Q4 2026 earnings at $1.16 EPS, FY2026 earnings at $3.29 EPS, Q4 2027 earnings at $1.96 EPS and FY2027 earnings at $4.96 EPS.

A number of other brokerages have also issued reports on LUV. Evercore raised their price target on Southwest Airlines from $44.00 to $52.00 in a research note on Thursday, June 25th. Weiss Ratings cut shares of Southwest Airlines from a "hold (c+)" rating to a "hold (c)" rating in a research report on Tuesday. Argus lowered their target price on shares of Southwest Airlines from $55.00 to $45.00 and set a "buy" rating for the company in a report on Friday, April 24th. Wells Fargo & Company upped their price target on shares of Southwest Airlines from $44.00 to $50.00 and gave the stock an "equal weight" rating in a research report on Tuesday, June 30th. Finally, Citigroup dropped their price target on shares of Southwest Airlines from $55.00 to $50.00 and set a "neutral" rating for the company in a research report on Friday, July 24th. Nine research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and four have issued a Sell rating to the company. According to data from MarketBeat.com, Southwest Airlines presently has an average rating of "Hold" and an average price target of $49.55.

Southwest Airlines Price Performance

Shares of NYSE:LUV opened at $46.93 on Friday. The company has a market cap of $22.96 billion, a P/E ratio of 28.79, a P/E/G ratio of 0.43 and a beta of 1.14. The business has a fifty day simple moving average of $47.04 and a 200-day simple moving average of $44.52. Southwest Airlines has a 52 week low of $28.98 and a 52 week high of $55.11. The company has a quick ratio of 0.42, a current ratio of 0.49 and a debt-to-equity ratio of 0.54.

Southwest Airlines (NYSE:LUV - Get Free Report) last issued its quarterly earnings results on Wednesday, July 22nd. The airline reported $0.94 earnings per share for the quarter, beating the consensus estimate of $0.52 by $0.42. Southwest Airlines had a return on equity of 14.15% and a net margin of 2.78%.The company had revenue of $8.72 billion during the quarter, compared to the consensus estimate of $8.58 billion. During the same period in the previous year, the firm posted $0.43 EPS. Southwest Airlines's revenue was up 16.4% on a year-over-year basis. Southwest Airlines has set its FY 2026 guidance at 3.250-4.250 EPS and its Q3 2026 guidance at 0.500-0.750 EPS.

Southwest Airlines Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 24th. Investors of record on Thursday, September 3rd will be issued a $0.18 dividend. The ex-dividend date is Thursday, September 3rd. This represents a $0.72 annualized dividend and a yield of 1.5%. Southwest Airlines's dividend payout ratio (DPR) is presently 44.17%.

Institutional Investors Weigh In On Southwest Airlines

Institutional investors have recently bought and sold shares of the business. AQR Capital Management LLC boosted its position in Southwest Airlines by 100.6% during the 1st quarter. AQR Capital Management LLC now owns 39,347 shares of the airline's stock worth $1,303,000 after purchasing an additional 19,729 shares during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its position in Southwest Airlines by 5.4% in the first 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 during the period. Empowered Funds LLC raised its position in Southwest Airlines by 7.6% in the first quarter. Empowered Funds LLC now owns 7,459 shares of the airline's stock valued at $250,000 after purchasing an additional 527 shares during the period. EverSource Wealth Advisors LLC lifted its stake in shares of Southwest Airlines by 73.4% during the second quarter. EverSource Wealth Advisors LLC now owns 5,690 shares of the airline's stock worth $185,000 after purchasing an additional 2,408 shares in the last quarter. Finally, First Trust Advisors LP boosted its position in shares of Southwest Airlines by 47.4% in the second 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 period. 80.82% of the stock is currently owned by hedge funds and other institutional investors.

Trending Headlines about Southwest Airlines

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

• Positive Sentiment: Lower oil prices could benefit airlines by reducing jet-fuel expenses and supporting profitability if the decline persists. Oil Just Lost its Inflation Premium: Here's Who Wins if Prices Stay Low
• Positive Sentiment: Southwest is promoting a new business-traveler offering, which could help increase corporate demand and diversify revenue beyond leisure travel. Southwest Airlines is courting business travelers with a new offering
• Positive Sentiment: Boeing’s FAA certification of the 737 Max 7 clears a regulatory hurdle for the aircraft. Future deliveries could give Southwest additional fleet flexibility and support capacity growth, although passenger service is not expected until 2027. Boeing’s Smallest 737 Max Finally Wins FAA Certification
• Neutral Sentiment: Southwest’s limited-time $5 companion promotion offers unlimited use on qualifying flights during the first two months of next year. The campaign may stimulate bookings and customer engagement, but the heavy discount could also weigh on fares and revenue per passenger. Southwest Airlines will let you bring along a friend for just $5
• Neutral Sentiment: Southwest has continued updating its extra-seat policy, including complimentary additional seats for eligible passengers. The change may improve customer experience but has uncertain financial implications. Southwest's extra-seat policy has changed
• Negative Sentiment: Zacks Research made mixed revisions to Southwest’s longer-term outlook: Q1 2027 EPS rose to $0.81 from $0.66, Q3 2027 increased to $1.04 from $1.01, and FY2028 rose to $5.83 from $5.70. However, Q2 2027 fell to $1.16 from $1.22 and Q2 2028 edged down to $1.29 from $1.30. Zacks maintained a Hold rating, limiting the bullish impact.

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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