Southwest Airlines (NYSE:LUV) Stock Price Expected to Rise, Bank of America Analyst Says

Southwest Airlines (NYSE:LUV) had its target price raised by equities research analysts at Bank of America from $37.00 to $42.00 in a report released on Friday,Benzinga reports. The firm presently has an “underperform” rating on the airline’s stock. Bank of America‘s target price suggests a potential downside of 13.29% from the company’s previous close.

Several other research firms have also recently commented on LUV. Seaport Research Partners raised their target price on shares of Southwest Airlines from $46.00 to $52.00 and gave the stock a “buy” rating in a research note on Friday, January 9th. UBS Group increased their price target on shares of Southwest Airlines from $43.00 to $45.00 and gave the stock a “neutral” rating in a report on Tuesday, January 6th. Deutsche Bank Aktiengesellschaft raised their price objective on shares of Southwest Airlines from $40.00 to $48.00 and gave the company a “buy” rating in a research report on Friday, December 12th. BNP Paribas Exane boosted their target price on Southwest Airlines from $19.00 to $24.00 and gave the stock an “underperform” rating in a research report on Monday, December 8th. Finally, The Goldman Sachs Group increased their target price on Southwest Airlines from $26.00 to $29.00 and gave the stock a “sell” rating in a research note on Tuesday, January 13th. Seven equities research analysts have rated the stock with a Buy rating, ten have assigned a Hold rating and four have given a Sell rating to the company’s stock. Based on data from MarketBeat, Southwest Airlines has a consensus rating of “Hold” and an average target price of $44.34.

Southwest Airlines Trading Up 18.5%

Shares of LUV stock opened at $48.44 on Friday. The business’s 50 day moving average is $40.42 and its two-hundred day moving average is $35.14. Southwest Airlines has a twelve month low of $23.82 and a twelve month high of $49.12. The company has a market capitalization of $25.05 billion, a P/E ratio of 57.66, a price-to-earnings-growth ratio of 0.37 and a beta of 1.16. The company has a current ratio of 0.49, a quick ratio of 0.42 and a debt-to-equity ratio of 0.52.

Southwest Airlines (NYSE:LUV) last released its quarterly earnings results on Wednesday, January 28th. The airline reported $0.58 EPS for the quarter, topping the consensus estimate of $0.56 by $0.02. Southwest Airlines had a return on equity of 6.11% and a net margin of 1.57%.The business had revenue of $7.44 billion during the quarter, compared to analysts’ expectations of $7.51 billion. During the same quarter in the prior year, the business earned $0.56 earnings per share. The company’s quarterly revenue was up 7.4% compared to the same quarter last year. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. Equities analysts forecast that Southwest Airlines will post 1.55 EPS for the current year.

Institutional Trading of Southwest Airlines

Several institutional investors and hedge funds have recently modified their holdings of the business. Ameriprise Financial Inc. increased its stake in shares of Southwest Airlines by 43.7% during the 3rd quarter. Ameriprise Financial Inc. now owns 12,335,167 shares of the airline’s stock worth $393,615,000 after purchasing an additional 3,753,183 shares in the last quarter. JPMorgan Chase & Co. increased its position in Southwest Airlines by 13.6% during the third quarter. JPMorgan Chase & Co. now owns 12,218,086 shares of the airline’s stock worth $389,879,000 after buying an additional 1,459,235 shares in the last quarter. Artisan Partners Limited Partnership raised its holdings in shares of Southwest Airlines by 0.9% in the second quarter. Artisan Partners Limited Partnership now owns 10,763,935 shares of the airline’s stock worth $349,182,000 after acquiring an additional 98,290 shares during the last quarter. Arrowstreet Capital Limited Partnership lifted its position in shares of Southwest Airlines by 2,403.8% in the second quarter. Arrowstreet Capital Limited Partnership now owns 10,120,368 shares of the airline’s stock valued at $328,305,000 after acquiring an additional 9,716,160 shares in the last quarter. Finally, Invesco Ltd. boosted its stake in shares of Southwest Airlines by 9.2% during the third quarter. Invesco Ltd. now owns 6,837,197 shares of the airline’s stock valued at $218,175,000 after acquiring an additional 577,326 shares during the last quarter. Hedge funds and other institutional investors own 80.82% of the company’s stock.

Southwest Airlines News Roundup

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

• Positive Sentiment: Company raised 2026 adjusted EPS guidance to at least $4.00 (more than 300% above 2025), signaling a large profit surge driven by new fees and pricing changes. PR News Release
• Positive Sentiment: Management ended open seating and introduced assigned seats plus new fees (e.g., seat selection, ancillary upsells). Analysts and investors view this as a structural revenue opportunity that prompted strong buying. CNBC: Forecasts profit surge
• Positive Sentiment: Q4 EPS beat consensus (reported $0.58 vs. ~$0.56 expected) and operating results showed profit improvement, supporting the credibility of management’s transformation. Yahoo Finance: Q4 Highlights
• Neutral Sentiment: Analysts remain mixed — some upgraded targets or reiterated conviction (JP Morgan Overweight; Evercore bumped target to $45 in‑line), but the median target is still below current levels, showing divergent views on valuation. Evercore ISI Price Target
• Neutral Sentiment: Investor commentary and transcripts highlight that the company’s transformation is underway (strong bookings, ancillary rollout); full realization depends on execution and demand durability. Earnings Call Transcript
• Negative Sentiment: Q4 revenue ($7.44B) missed consensus and some metrics (cash from operations, capex increase) show balance‑sheet pressure; revenue miss tempers the beat and raises execution risk. Zacks: Revenues Lag
• Negative Sentiment: Q1 2026 EPS guidance of ~$0.45 came in below the Street (~$0.57), creating a near‑term earnings gap that could produce volatility as investors re‑rate the timing of benefits. (Company press and market coverage document the Q1 guide.)
• Negative Sentiment: Unusual put‑option activity and commentary that shares may be “fully valued” suggest some traders are hedging or taking profits after the rapid run; that can amplify short‑term downside if sentiment shifts. Seeking Alpha: Valuation Caution

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.