Southwest Airlines Co. (NYSE:LUV) Receives Average Recommendation of “Hold” from Analysts

Southwest Airlines Co. (NYSE:LUV) has been given an average rating of “Hold” by the twenty-one ratings firms that are currently covering the firm, MarketBeat.com reports. Three investment analysts have rated the stock with a sell rating, twelve have issued a hold rating and six have assigned a buy rating to the company. The average twelve-month target price among analysts that have issued a report on the stock in the last year is $42.1111.

Several equities analysts recently weighed in on the stock. Jefferies Financial Group increased their price target on shares of Southwest Airlines from $33.00 to $34.00 and gave the stock a “hold” rating in a report on Tuesday, December 2nd. Raymond James Financial raised their target price on shares of Southwest Airlines from $42.00 to $49.00 and gave the stock an “outperform” rating in a report on Friday, December 19th. Weiss Ratings restated a “hold (c)” rating on shares of Southwest Airlines in a research report on Monday, December 29th. Deutsche Bank Aktiengesellschaft increased their price target on Southwest Airlines from $40.00 to $48.00 and gave the stock a “buy” rating in a research report on Friday, December 12th. Finally, Citigroup boosted their price objective on Southwest Airlines from $38.00 to $44.00 and gave the company a “neutral” rating in a report on Wednesday.

Key Headlines Impacting Southwest Airlines

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

• Positive Sentiment: Rare double-upgrade from JPMorgan — JPMorgan upgraded LUV from underweight to overweight and lifted its price target to $60, a large upward move that traders say is the main catalyst for the rally as it signals materially higher earnings expectations. Barron’s: Rare Double Upgrade
• Positive Sentiment: Multiple price-target raises — Citi and UBS both bumped targets (Citi to $44, UBS to $45), reinforcing the analyst trend higher and supporting upside in the stock as models are re-priced for better forward earnings. Citi price target raise
• Positive Sentiment: Broader analyst optimism — Citigroup and other firms published bullish commentary forecasting notable price appreciation based on improving fundamentals and potential margin recovery. Citigroup forecast
• Neutral Sentiment: Susquehanna raised its target to $45 but kept a “neutral” rating — the higher target supports the rally but the retained rating tempers how decisive the firm views near-term upside. Benzinga: Susquehanna note
• Neutral Sentiment: Strategic/cabin changes under review — articles on Southwest’s cabin revamp and assigned seating argue these initiatives could reshape unit revenue and customer experience, but benefits depend on execution and timing. Yahoo: Cabin revamp
• Neutral Sentiment: New marketing/partnerships — a legacy partnership with the Chicago Cubs is positive PR and revenue/brand-supportive, but unlikely to move near-term fundamentals materially. MLB press release
• Neutral Sentiment: Mixed analyst landscape — several firms remain cautious/hold-rated (e.g., Wells Fargo), so while sentiment is tilting positive, coverage is not uniformly bullish. Wells Fargo hold

Hedge Funds Weigh In On Southwest Airlines

Several institutional investors have recently made changes to their positions in the company. Ameriprise Financial Inc. grew its position in Southwest Airlines by 43.7% during the third quarter. Ameriprise Financial Inc. now owns 12,335,167 shares of the airline’s stock valued at $393,615,000 after buying an additional 3,753,183 shares during the period. JPMorgan Chase & Co. boosted its stake in shares of Southwest Airlines by 13.6% during the 3rd quarter. JPMorgan Chase & Co. now owns 12,218,086 shares of the airline’s stock worth $389,879,000 after acquiring an additional 1,459,235 shares in the last quarter. Artisan Partners Limited Partnership grew its position in shares of Southwest Airlines by 0.9% during the 2nd quarter. Artisan Partners Limited Partnership now owns 10,763,935 shares of the airline’s stock valued at $349,182,000 after acquiring an additional 98,290 shares during the period. Arrowstreet Capital Limited Partnership increased its stake in shares of Southwest Airlines by 2,403.8% in the 2nd 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 in the last quarter. Finally, Invesco Ltd. raised its holdings in Southwest Airlines by 9.2% in 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 during the period. 80.82% of the stock is owned by hedge funds and other institutional investors.

Southwest Airlines Price Performance

Shares of LUV opened at $44.46 on Friday. 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 company’s fifty day moving average price is $37.32 and its 200-day moving average price is $34.26. Southwest Airlines has a 1-year low of $23.82 and a 1-year high of $45.02. The firm has a market capitalization of $22.99 billion, a PE ratio of 68.39, a price-to-earnings-growth ratio of 0.27 and a beta of 1.16.

Southwest Airlines (NYSE:LUV) last issued its quarterly earnings results on Tuesday, February 6th. The airline reported ($0.38) EPS for the quarter. The firm had revenue of $6.17 billion for the quarter. Southwest Airlines had a return on equity of 6.39% and a net margin of 1.38%. On average, equities research analysts predict that Southwest Airlines 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 Friday, January 16th. Shareholders of record on Friday, December 26th will be issued a $0.18 dividend. The ex-dividend date of this dividend is Friday, December 26th. This represents a $0.72 dividend on an annualized basis and a yield of 1.6%. Southwest Airlines’s payout ratio is presently 110.77%.

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.