Southwest Airlines Sees Unusually High Options Volume (NYSE:LUV)

Southwest Airlines Co. (NYSE:LUV) was the target of unusually large options trading activity on Wednesday. Stock investors bought 40,382 put options on the company. This is an increase of approximately 65% compared to the typical daily volume of 24,488 put options.

Institutional Investors Weigh In On Southwest Airlines

A number of institutional investors and hedge funds have recently added to or reduced their stakes in LUV. Transcend Capital Advisors LLC raised its holdings in Southwest Airlines by 4.2% in the 4th quarter. Transcend Capital Advisors LLC now owns 6,726 shares of the airline’s stock valued at $278,000 after buying an additional 272 shares during the period. Ameriflex Group Inc. lifted its stake in Southwest Airlines by 7.1% during the 2nd quarter. Ameriflex Group Inc. now owns 4,690 shares of the airline’s stock worth $148,000 after acquiring an additional 310 shares in the last quarter. Asset Management One Co. Ltd. lifted its stake in Southwest Airlines by 1.7% during the 4th quarter. Asset Management One Co. Ltd. now owns 19,268 shares of the airline’s stock worth $792,000 after acquiring an additional 315 shares in the last quarter. Benjamin Edwards Inc. boosted its stake in shares of Southwest Airlines by 1.4% in the second quarter. Benjamin Edwards Inc. now owns 24,857 shares of the airline’s stock valued at $806,000 after purchasing an additional 333 shares during the period. Finally, GAMMA Investing LLC boosted its position in Southwest Airlines by 2.4% in the 3rd quarter. GAMMA Investing LLC now owns 14,285 shares of the airline’s stock valued at $456,000 after buying an additional 341 shares during the period. Hedge funds and other institutional investors own 80.82% of the company’s stock.

Trending Headlines about Southwest Airlines

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

• Positive Sentiment: Management issued very strong FY‑2026 guidance, forecasting adjusted EPS of at least $4.00 (up sharply from 2025), a figure management says reflects revenue initiatives and the company’s business transformation. SOUTHWEST AIRLINES REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS
• Positive Sentiment: Q4 earnings slightly beat consensus on an EPS basis (reported ~$0.58 vs. estimates ~0.55/0.56) and management highlighted improved operating profit and net income year‑over‑year. Beats support confidence in profitability improvement. Southwest Airlines (LUV) Surpasses Q4 Earnings Estimates
• Positive Sentiment: Strategic changes — ending 54 years of open seating, introducing assigned seats and earlier baggage fees — are explicitly tied to revenue and margin upside by management and coverage, reinforcing the bullish long‑term thesis. Southwest ends open seating after 54 years. Here’s what the last flight was like
• Neutral Sentiment: Revenue was modestly below street expectations (Q4 revenue ~$7.44B vs. estimates around $7.5B), a sign the top line hasn’t fully caught up to margin gains. Southwest (LUV) Reports Q4 Earnings: What Key Metrics Have to Say
• Neutral Sentiment: Quarterly cash flow dynamics were mixed — operating cash fell and cash balances declined while capex rose — which matters for liquidity as the company scales initiatives. Southwest Airlines Company (LUV) Stock Rises on Q4 2025 Earnings
• Negative Sentiment: First‑quarter 2026 EPS guidance came in below consensus (management guided to ~$0.45 vs. street ~0.57), signaling near‑term earnings pressure despite the strong full‑year outlook. SOUTHWEST AIRLINES REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS
• Negative Sentiment: Unusual options activity showed a sizable uptick in put buying (40,382 puts, ~65% above typical daily volume), indicating some traders are hedging or expressing short‑term bearishness.
• Positive Sentiment: Some analysts raised targets (Jefferies increased its price target to $45), reflecting improved expectations from select sell‑side firms. Jefferies Financial Group Raises Southwest Airlines (NYSE:LUV) Price Target to $45.00

Analyst Upgrades and Downgrades

LUV has been the topic of a number of recent analyst reports. Sanford C. Bernstein increased their price target on shares of Southwest Airlines from $31.00 to $34.00 and gave the stock a “market perform” rating in a report on Thursday, November 20th. BMO Capital Markets began coverage on shares of Southwest Airlines in a research note on Tuesday, December 9th. They set a “market perform” rating and a $43.00 target price on the stock. Deutsche Bank Aktiengesellschaft raised their target price on Southwest Airlines from $40.00 to $48.00 and gave the company a “buy” rating in a research report on Friday, December 12th. TD Cowen upped their price target on Southwest Airlines from $31.00 to $42.00 and gave the stock a “hold” rating in a report on Friday, December 12th. Finally, BNP Paribas Exane increased their price target on Southwest Airlines from $19.00 to $24.00 and gave the stock an “underperform” rating in a research report on Monday, December 8th. Six analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and four have issued a Sell rating to the company’s stock. According to MarketBeat, the company currently has a consensus rating of “Hold” and a consensus price target of $42.37.

Southwest Airlines Stock Down 1.0%

NYSE LUV opened at $40.94 on Thursday. The business has a fifty day moving average price of $40.07 and a 200 day moving average price of $35.05. The company has a debt-to-equity ratio of 0.52, a quick ratio of 0.42 and a current ratio of 0.49. The company has a market cap of $21.17 billion, a P/E ratio of 62.98, a P/E/G ratio of 0.37 and a beta of 1.16. Southwest Airlines has a one year low of $23.82 and a one year high of $45.02.

Southwest Airlines (NYSE:LUV) last announced its quarterly earnings data 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. The company had revenue of $7.44 billion during 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’s revenue was up 7.4% compared to the same quarter last year. During the same quarter in the prior year, the company earned $0.56 EPS. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. Research analysts anticipate that Southwest Airlines will post 1.55 EPS for the current fiscal year.

Southwest Airlines Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, January 16th. Stockholders of record on Friday, December 26th were given a dividend of $0.18 per share. The ex-dividend date of this dividend was Friday, December 26th. This represents a $0.72 annualized dividend and a dividend yield of 1.8%. 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.