Southwest Airlines (NYSE:LUV) Reaches New 1-Year High – Still a Buy?

Southwest Airlines Co. (NYSE:LUV)’s share price reached a new 52-week high during trading on Wednesday . The stock traded as high as $54.70 and last traded at $53.19, with a volume of 1153076 shares changing hands. The stock had previously closed at $54.07.

Southwest Airlines News Roundup

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

• Positive Sentiment: Launched assigned seating and new baggage fees, a move investors view as a meaningful new ancillary-revenue stream that helped spark the post-earnings rally following the Jan. 28 call. Southwest Airlines Shares Jump 23% in 2026 After Launching Assigned Seating and Bag Fees
• Positive Sentiment: Zacks Research repeatedly raised near‑term and multi‑year EPS forecasts and maintains a “Strong‑Buy” rating — signaling improving earnings visibility that supports a higher valuation multiple. MarketBeat LUV / Zacks coverage
• Positive Sentiment: Product upgrade: Southwest announced Starlink ultra‑fast Wi‑Fi coming this summer (and broader cabin improvements) — a service enhancement that can support premium ancillaries, customer satisfaction and competitiveness. SOUTHWEST AIRLINES BRINGS STARLINK ULTRA-FAST WIFI ONBOARD
• Positive Sentiment: Fundamentals piece: Analysis highlighting Southwest’s strong cash‑flow growth versus peers reinforces bullish narratives around margin recovery and free cash flow generation. Southwest Airlines (LUV): Massive Cash Flow Growth Vs. Sector Peers
• Neutral Sentiment: Analyst opinions are mixed in broader coverage pieces — some see upside from the new initiatives while others caution on execution and legacy operational risks. Analysts’ Opinions Are Mixed on These Industrial Goods Stocks
• Negative Sentiment: Potential legal/governance overhang: Halper Sadeh LLC is soliciting shareholders to contact the firm about potential rights — could signal litigation risk or governance scrutiny that investors dislike. Halper Sadeh LLC Encourages Southwest Airlines Co. Shareholders to Contact the Firm

Wall Street Analysts Forecast Growth

Several equities research analysts have recently weighed in on LUV shares. Zacks Research raised shares of Southwest Airlines from a “hold” rating to a “strong-buy” rating in a research report on Friday, January 30th. Barclays upgraded Southwest Airlines from an “equal weight” rating to an “overweight” rating and lifted their target price for the stock from $34.00 to $56.00 in a research report on Tuesday, December 16th. BMO Capital Markets upgraded shares of Southwest Airlines from a “market perform” rating to an “outperform” rating and raised their price target for the stock from $43.00 to $57.50 in a research report on Friday, January 30th. The Goldman Sachs Group raised their target price on shares of Southwest Airlines from $29.00 to $32.00 and gave the stock a “sell” rating in a report on Friday, January 30th. Finally, Evercore increased their price target on Southwest Airlines from $40.00 to $45.00 and gave the stock an “in-line” rating in a research report on Thursday, January 29th. One investment analyst has rated the stock with a Strong Buy rating, six have issued a Buy rating, ten have given a Hold rating and three have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the company currently has an average rating of “Hold” and a consensus price target of $46.92.

Southwest Airlines Stock Down 0.7%

The firm has a market cap of $24.79 billion, a price-to-earnings ratio of 60.41, a price-to-earnings-growth ratio of 0.36 and a beta of 1.15. The company has a quick ratio of 0.45, a current ratio of 0.52 and a debt-to-equity ratio of 0.57. The stock’s 50 day moving average is $43.81 and its 200 day moving average is $36.21.

Southwest Airlines (NYSE:LUV) last posted its quarterly earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.56 by $0.02. Southwest Airlines had a return on equity of 6.18% and a net margin of 1.57%.The company had revenue of $7.44 billion for the quarter, compared to analysts’ expectations of $7.51 billion. During the same quarter in the prior year, the company earned $0.56 earnings per share. The firm’s revenue was up 7.4% on a year-over-year basis. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. Analysts forecast that Southwest Airlines Co. will post 1.55 EPS for the current year.

Southwest Airlines Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, April 2nd. Investors of record on Thursday, March 12th will be issued a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a dividend yield of 1.4%. The ex-dividend date is Thursday, March 12th. Southwest Airlines’s dividend payout ratio (DPR) is currently 85.71%.

Hedge Funds Weigh In On Southwest Airlines

Institutional investors and hedge funds have recently modified their holdings of the stock. Arrowstreet Capital Limited Partnership boosted its position in Southwest Airlines by 2,403.8% during the second quarter. Arrowstreet Capital Limited Partnership now owns 10,120,368 shares of the airline’s stock valued at $328,305,000 after purchasing an additional 9,716,160 shares during the last quarter. Norges Bank bought a new position in Southwest Airlines during the fourth quarter valued at approximately $172,038,000. Ameriprise Financial Inc. lifted its stake in Southwest Airlines by 43.7% in the third quarter. Ameriprise Financial Inc. now owns 12,335,167 shares of the airline’s stock valued at $393,615,000 after acquiring an additional 3,753,183 shares during the last quarter. SG Americas Securities LLC increased its stake in shares of Southwest Airlines by 2,468.4% during the 4th quarter. SG Americas Securities LLC now owns 3,752,352 shares of the airline’s stock worth $155,085,000 after purchasing an additional 3,606,255 shares during the last quarter. Finally, Massachusetts Financial Services Co. MA bought a new position in shares of Southwest Airlines during the 4th quarter valued at $143,450,000. 80.82% of the stock is currently owned by hedge funds and other institutional investors.

Southwest Airlines Company Profile

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.