Southwest Airlines (NYSE:LUV) Given New $40.00 Price Target at Bank of America

Southwest Airlines (NYSE:LUV) had its price objective decreased by Bank of America from $42.00 to $40.00 in a research note released on Wednesday morning,MarketScreener reports. Bank of America currently has an underperform rating on the airline’s stock.

Other research analysts have also issued research reports about the company. JPMorgan Chase & Co. upgraded Southwest Airlines from an “underweight” rating to an “overweight” rating and increased their price target for the stock from $36.00 to $60.00 in a report on Friday, January 9th. Susquehanna upped their target price on Southwest Airlines from $45.00 to $55.00 and gave the stock a “neutral” rating in a research report on Tuesday, February 3rd. TD Cowen cut their target price on Southwest Airlines from $66.00 to $55.00 and set a “buy” rating on the stock in a report on Monday, March 9th. Raymond James Financial lifted their price target on shares of Southwest Airlines from $42.00 to $49.00 and gave the company an “outperform” rating in a research report on Friday, December 19th. Finally, Wall Street Zen lowered shares of Southwest Airlines from a “buy” rating to a “hold” rating in a research note on Saturday, March 14th. Eight investment analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and four have issued a Sell rating to the company’s stock. Based on data from MarketBeat, Southwest Airlines currently has an average rating of “Hold” and an average target price of $44.94.

Southwest Airlines Price Performance

Shares of NYSE LUV opened at $38.24 on Wednesday. The firm’s 50-day moving average price is $45.70 and its 200-day moving average price is $39.36. Southwest Airlines has a 1-year low of $23.82 and a 1-year high of $55.11. The firm has a market capitalization of $18.78 billion, a P/E ratio of 45.53, a P/E/G ratio of 0.27 and a beta of 1.19. The company has a current ratio of 0.52, a quick ratio of 0.45 and a debt-to-equity ratio of 0.57.

Southwest Airlines (NYSE:LUV) last issued its earnings results on Wednesday, January 28th. The airline reported $0.58 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 during the quarter, compared to the consensus estimate of $7.51 billion. During the same period last year, the business posted $0.56 EPS. The firm’s revenue for the quarter 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 research analysts anticipate that Southwest Airlines will post 1.55 earnings per share for the current fiscal year.

Southwest Airlines Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, April 2nd. Stockholders of record on Thursday, March 12th will be paid a $0.18 dividend. The ex-dividend date of this dividend is Thursday, March 12th. This represents a $0.72 annualized dividend and a dividend yield of 1.9%. Southwest Airlines’s dividend payout ratio is 85.71%.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of the stock. Norges Bank bought a new position in Southwest Airlines during the 4th quarter valued at $172,038,000. Ameriprise Financial Inc. boosted its holdings in 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 acquiring an additional 3,753,183 shares during the last quarter. SG Americas Securities LLC grew its stake in shares of Southwest Airlines by 2,468.4% in the 4th quarter. SG Americas Securities LLC now owns 3,752,352 shares of the airline’s stock worth $155,085,000 after acquiring an additional 3,606,255 shares in the last quarter. Massachusetts Financial Services Co. MA bought a new stake in shares of Southwest Airlines in the 4th quarter worth $143,450,000. Finally, Franklin Resources Inc. raised its holdings in shares of Southwest Airlines by 7.0% in the fourth quarter. Franklin Resources Inc. now owns 40,200,530 shares of the airline’s stock valued at $1,661,488,000 after purchasing an additional 2,626,853 shares during the last quarter. Hedge funds and other institutional investors own 80.82% of the company’s stock.

Key Headlines Impacting Southwest Airlines

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

• Positive Sentiment: Jefferies nudged its price target up to $42 from $41 and kept a “hold” rating, signaling modest support for the shares. Jefferies raises PT to $42
• Positive Sentiment: BMO Capital Markets and Raymond James each lowered their PTs to $45 but kept “outperform” ratings — that keeps institutional sentiment constructive and implies an analyst-implied upside (~18% at recent prices). BMO lowers PT to $45, keeps outperform Raymond James lowers PT to $45, keeps outperform
• Neutral Sentiment: Bank of America research notes that higher jet fuel is pressuring airline margins but says strong travel demand and fare increases could offset some of the pain — this is a mixed macro signal that can cap rallies while supporting revenue resilience. High Fuel Costs Weigh on Airlines (BofA)
• Negative Sentiment: Goldman Sachs cut its PT to $30 and maintained a “sell” rating — a substantive negative as it implies meaningful downside and could pressure sentiment among institutional holders. Goldman Sachs lowers PT to $30, keeps sell
• Negative Sentiment: Bank of America Securities trimmed its PT to $40 and kept an “underperform” rating, another bearish signal that increases near-term selling pressure. BofA lowers PT to $40, keeps underperform
• Negative Sentiment: UBS trimmed its PT to $56 from $59 (reiterating buy), a mild negative that reflects higher jet-fuel assumptions and slightly reduced upside. UBS cuts PT to $56
• Negative Sentiment: A broader industry report highlights the Iran war and related costs are pushing airlines toward higher fares and slimmer margins — a macro headwind that could pressure Southwest’s profits and sentiment into the summer. Airlines face price hikes as Iran war pressures business

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.