Zacks Research Has Optimistic Outlook of LUV Q1 Earnings

Southwest Airlines Co. (NYSE:LUV) – Equities research analysts at Zacks Research increased their Q1 2026 EPS estimates for shares of Southwest Airlines in a report issued on Wednesday, February 11th. Zacks Research analyst Team now forecasts that the airline will post earnings of $0.45 per share for the quarter, up from their prior forecast of $0.31. Zacks Research has a “Strong-Buy” rating on the stock. The consensus estimate for Southwest Airlines’ current full-year earnings is $1.55 per share. Zacks Research also issued estimates for Southwest Airlines’ Q2 2026 earnings at $1.30 EPS, Q3 2026 earnings at $0.86 EPS, Q4 2026 earnings at $1.38 EPS, FY2026 earnings at $4.00 EPS, Q1 2027 earnings at $0.52 EPS, Q2 2027 earnings at $1.39 EPS and FY2027 earnings at $4.81 EPS.

Other equities analysts have also recently issued reports about the company. Seaport Research Partners raised their price objective on Southwest Airlines from $57.00 to $58.00 in a report on Thursday, January 29th. Barclays raised Southwest Airlines from an “equal weight” rating to an “overweight” rating and upped their target price for the stock from $34.00 to $56.00 in a research note on Tuesday, December 16th. UBS Group lifted their price target on shares of Southwest Airlines from $45.00 to $51.00 and gave the stock a “neutral” rating in a research note on Monday, February 2nd. Bank of America boosted their price objective on shares of Southwest Airlines from $37.00 to $42.00 and gave the stock an “underperform” rating in a report on Friday, January 30th. Finally, The Goldman Sachs Group increased their target price on shares of Southwest Airlines from $29.00 to $32.00 and gave the company a “sell” rating in a report on Friday, January 30th. One analyst has rated the stock with a Strong Buy rating, six have assigned a Buy rating, ten have given a Hold rating and three have given a Sell rating to the company’s stock. According to data from MarketBeat, Southwest Airlines presently has an average rating of “Hold” and an average target price of $46.92.

Southwest Airlines Trading Up 0.5%

NYSE LUV opened at $51.06 on Friday. 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 simple moving average is $44.08 and its two-hundred day simple moving average is $36.34. Southwest Airlines has a twelve month low of $23.82 and a twelve month high of $54.70. The company has a market capitalization of $25.09 billion, a price-to-earnings ratio of 60.79, a PEG ratio of 0.36 and a beta of 1.15.

Southwest Airlines (NYSE:LUV) last posted its quarterly earnings data on Wednesday, January 28th. The airline reported $0.58 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.56 by $0.02. The company had revenue of $7.44 billion during the quarter, compared to the consensus estimate of $7.51 billion. Southwest Airlines had a net margin of 1.57% and a return on equity of 6.18%. The firm’s revenue was up 7.4% compared to the same quarter last year. During the same period in the previous year, the firm posted $0.56 EPS. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS.

Southwest Airlines Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Thursday, April 2nd. Shareholders of record on Thursday, March 12th will be given a dividend of $0.18 per share. The ex-dividend date of this dividend is Thursday, March 12th. This represents a $0.72 annualized dividend and a yield of 1.4%. Southwest Airlines’s dividend payout ratio is presently 85.71%.

Hedge Funds Weigh In On Southwest Airlines

Hedge funds have recently modified their holdings of the company. FORA Capital LLC bought a new stake in shares of Southwest Airlines in the fourth quarter worth about $5,120,000. Parkside Financial Bank & Trust lifted its holdings in Southwest Airlines by 7.5% in the 4th quarter. Parkside Financial Bank & Trust now owns 3,063 shares of the airline’s stock worth $127,000 after buying an additional 213 shares during the period. Maverick Capital Ltd. purchased a new stake in Southwest Airlines in the 4th quarter worth approximately $1,799,000. Marshall Wace LLP grew its position in shares of Southwest Airlines by 368.2% in the 4th quarter. Marshall Wace LLP now owns 241,392 shares of the airline’s stock worth $9,977,000 after buying an additional 331,392 shares during the last quarter. Finally, CANADA LIFE ASSURANCE Co increased its stake in shares of Southwest Airlines by 25.4% during the fourth quarter. CANADA LIFE ASSURANCE Co now owns 187,445 shares of the airline’s stock valued at $7,751,000 after buying an additional 38,023 shares during the period. Hedge funds and other institutional investors own 80.82% of the company’s stock.

Key Southwest Airlines News

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

• Positive Sentiment: The company implemented assigned seating and introduced bag fees, which investors see as durable revenue levers that helped ignite a year-to-date rally after the January earnings call. Southwest Airlines Shares Jump 23% in 2026 After Launching Assigned Seating and Bag Fees
• Positive Sentiment: Zacks Research sharply raised EPS forecasts across multiple quarters and years (FY2026, FY2027, FY2028 and quarterly calls), and rates LUV a “Strong‑Buy” — suggesting analysts expect materially stronger profitability and cash flow going forward. This upward revision cycle is a key driver of bullish investor sentiment. MarketBeat LUV – Zacks Research coverage
• Positive Sentiment: Coverage pieces highlighting strong cash‑flow growth versus peers reinforce the narrative that Southwest’s structural changes (revenue initiatives + cost control) are translating into superior financial performance. Southwest Airlines (LUV): Massive Cash Flow Growth Vs. Sector Peers | 2-Minute Analysis
• Positive Sentiment: Product upgrades (Starlink in-flight WiFi and a cabin overhaul) could improve ancillary revenue, customer satisfaction and competitive positioning if rollout and monetization succeed. Investors view this as a potential medium-term positive catalyst. Southwest’s Starlink WiFi and Cabin Overhaul Might Change The Case For Investing In Southwest Airlines (LUV)
• Neutral Sentiment: Management announced upcoming board of director changes; governance shifts can be neutral-to-positive depending on experience and execution but are not an immediate revenue driver. Southwest Airlines Announces Upcoming Board of Directors Changes
• Neutral Sentiment: Some analysts remain mixed on the stock; divergent views imply upside is tied to execution of revenue initiatives and cost control. Analysts’ Opinions Are Mixed on These Industrial Goods Stocks
• Negative Sentiment: A shareholder‑rights law firm (Halper Sadeh) is soliciting contacts from Southwest shareholders, signaling potential litigation or scrutiny that could create legal costs, distraction, or reputational risk. Monitor filings for specifics. Halper Sadeh LLC Encourages Southwest Airlines Co. Shareholders to Contact the Firm

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.