Southwest Airlines (NYSE:LUV) Updates Q1 2026 Earnings Guidance

Southwest Airlines (NYSE:LUV) updated its first quarter 2026 earnings guidance on Wednesday. The company provided earnings per share guidance of 0.450- for the period, compared to the consensus earnings per share estimate of 0.570. The company issued revenue guidance of -. Southwest Airlines also updated its FY 2026 guidance to 4.000- EPS.

Analyst Upgrades and Downgrades

Several analysts have recently issued reports on the stock. UBS Group lifted their target price on shares of Southwest Airlines from $43.00 to $45.00 and gave the company a “neutral” rating in a research report on Tuesday, January 6th. Susquehanna upped their target price on shares of Southwest Airlines from $35.00 to $45.00 and gave the stock a “neutral” rating in a report on Friday, January 9th. Seaport Research Partners upped their price objective on shares of Southwest Airlines from $46.00 to $52.00 and gave the company a “buy” rating in a research note on Friday, January 9th. Jefferies Financial Group raised their target price on shares of Southwest Airlines from $42.00 to $45.00 and gave the stock a “hold” rating in a research note on Monday. Finally, Wells Fargo & Company started coverage on Southwest Airlines in a research report on Thursday, December 18th. They issued an “equal weight” rating and a $45.00 price target for the company. Six investment analysts have rated the stock with a Buy rating, eleven have given a Hold rating and four have assigned a Sell rating to the stock. According to data from MarketBeat, the company currently has an average rating of “Hold” and an average price target of $42.37.

Southwest Airlines Trading Down 1.0%

Shares of NYSE:LUV traded down $0.40 during midday trading on Wednesday, reaching $40.94. 10,555,389 shares of the company’s stock were exchanged, compared to its average volume of 8,640,491. The company has a debt-to-equity ratio of 0.52, a current ratio of 0.49 and a quick ratio of 0.42. The stock has a market cap of $21.17 billion, a price-to-earnings ratio of 62.98, a P/E/G ratio of 0.38 and a beta of 1.16. The firm’s 50 day simple moving average is $39.89 and its two-hundred day simple moving average is $35.01. Southwest Airlines has a fifty-two week low of $23.82 and a fifty-two week high of $45.02.

Southwest Airlines (NYSE:LUV) last issued its quarterly earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.55 by $0.03. The business had revenue of $7.44 billion for the quarter, compared to analysts’ expectations of $7.51 billion. Southwest Airlines had a net margin of 1.38% and a return on equity of 6.39%. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. As a group, sell-side analysts forecast that Southwest Airlines will post 1.55 EPS for the current fiscal year.

Southwest Airlines Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Friday, January 16th. Shareholders of record on Friday, December 26th were given a $0.18 dividend. The ex-dividend date of this dividend was Friday, December 26th. This represents a $0.72 dividend on an annualized basis and a dividend yield of 1.8%. Southwest Airlines’s dividend payout ratio is currently 110.77%.

More Southwest Airlines News

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

• Positive Sentiment: Q4 EPS beat and improved profitability — Southwest reported Q4 EPS of $0.58, topping estimates and showing profit improvement versus prior year, supporting near-term earnings credibility. Article Title
• Positive Sentiment: Very strong FY2026 guidance — management guided to adjusted EPS of at least $4.00 for 2026 (vs. $0.93 adjusted in 2025), citing revenue initiatives and the business transformation; this materially raises forward-profit expectations. Article Title
• Positive Sentiment: Revenue initiatives — the shift from open seating to assigned seats plus new bag fees are being promoted as durable revenue levers that underpin the guidance and reframe Southwest’s unit economics. Article Title
• Neutral Sentiment: Revenue miss and mixed quarter — total revenue rose year-over-year to $7.44B but slightly missed consensus (~$7.51–7.59B), so top-line momentum is less clear even as margins improved. Article Title
• Neutral Sentiment: Analyst positioning — some firms are raising targets (Jefferies to $45) and others remain mixed, so Street views vary and price-target dispersion could sustain volatility. Article Title
• Negative Sentiment: Cash-flow and liquidity pressure — operating cash fell sharply and cash & equivalents declined materially YoY while capex rose, which could constrain flexibility if recovery stalls. Article Title
• Negative Sentiment: Elevated put-option activity — an unusual spike in put buying signals that some traders are hedging or betting on downside, which can increase intraday volatility. (No link available)

Institutional Trading of Southwest Airlines

Institutional investors have recently modified their holdings of the stock. Canada Pension Plan Investment Board boosted its holdings in Southwest Airlines by 315.3% in the 2nd quarter. Canada Pension Plan Investment Board now owns 1,247,837 shares of the airline’s stock valued at $40,480,000 after purchasing an additional 947,346 shares in the last quarter. Amundi lifted its holdings in Southwest Airlines by 116.4% in the third quarter. Amundi now owns 1,182,916 shares of the airline’s stock valued at $38,539,000 after acquiring an additional 636,261 shares during the period. Invesco Ltd. boosted its position in shares of Southwest Airlines by 9.2% during the 3rd quarter. Invesco Ltd. now owns 6,837,197 shares of the airline’s stock worth $218,175,000 after purchasing an additional 577,326 shares in the last quarter. Woodline Partners LP acquired a new position in shares of Southwest Airlines during the 3rd quarter worth $16,377,000. Finally, National Bank of Canada FI grew its stake in shares of Southwest Airlines by 35.7% during the 3rd quarter. National Bank of Canada FI now owns 1,025,314 shares of the airline’s stock worth $32,718,000 after purchasing an additional 269,496 shares during the period. Hedge funds and other institutional investors own 80.82% of the company’s stock.

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.