Southwest Airlines (NYSE:LUV) Trading 6.4% Higher Following Analyst Upgrade

Shares of Southwest Airlines Co. (NYSE:LUV) traded up 6.4% on Tuesday after UBS Group upgraded the stock from a neutral rating to a buy rating. UBS Group now has a $73.00 price target on the stock, up from their previous price target of $51.00. Southwest Airlines traded as high as $54.32 and last traded at $54.4030. 4,956,862 shares changed hands during mid-day trading, a decline of 52% from the average session volume of 10,257,155 shares. The stock had previously closed at $51.11.

LUV has been the subject of a number of other research reports. BNP Paribas Exane raised their price target on Southwest Airlines from $19.00 to $24.00 and gave the stock an “underperform” rating in a research note on Monday, December 8th. Bank of America upped 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. Seaport Research Partners lifted their target price on shares of Southwest Airlines from $57.00 to $58.00 in a research note on Thursday, January 29th. TD Cowen increased their price target on shares of Southwest Airlines from $42.00 to $50.00 and gave the stock a “hold” rating in a research note on Friday, January 30th. Finally, Wall Street Zen upgraded shares of Southwest Airlines from a “hold” rating to a “buy” rating in a report on Saturday, February 7th. One equities research analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating, nine have given a Hold rating and three have assigned a Sell rating to the company’s stock. Based on data from MarketBeat, the company has a consensus rating of “Hold” and an average price target of $48.14.

Trending Headlines about Southwest Airlines

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

• Positive Sentiment: UBS upgraded LUV from Neutral to Buy and raised its 12‑month price target to $73 (from $51), citing meaningful earnings upside from the carrier’s seating and fee initiatives — a direct driver of today’s rally. UBS upgrade report
• Positive Sentiment: Southwest announced an overhaul introducing assigned seats, checked‑bag fees, extra‑legroom options and plans for Starlink Wi‑Fi — changes designed to lift ancillary revenue and margins if executed well. Overhaul details
• Positive Sentiment: Analysts and commentary (Zacks and others) point to upward earnings‑estimate revisions and improving fundamentals that support further share gains if execution continues. Zacks analysis
• Neutral Sentiment: Market context: coverage pieces and pre‑market movers stories (Benzinga/MSN) amplified the reaction, so some of today’s move reflects headlines and momentum rather than fresh company results. Market movers writeup
• Negative Sentiment: Risks include execution and customer reaction to fees, plus Southwest’s recent quarterly revenue slightly missed consensus and margins remain thin — meaning upside depends on successful rollout and mix improvement. Notes on risks and results

Institutional Trading of Southwest Airlines

Several hedge funds and other institutional investors have recently made changes to their positions in the stock. Cibc World Market Inc. lifted its position in Southwest Airlines by 12.6% during the third quarter. Cibc World Market Inc. now owns 1,916,003 shares of the airline’s stock valued at $61,140,000 after purchasing an additional 214,092 shares in the last quarter. RWA Wealth Partners LLC bought a new position in shares of Southwest Airlines in the second quarter worth about $1,652,000. Hussman Strategic Advisors Inc. purchased a new position in shares of Southwest Airlines during the 3rd quarter valued at about $2,010,000. Howard Capital Management Inc. grew its stake in shares of Southwest Airlines by 8.3% during the 2nd quarter. Howard Capital Management Inc. now owns 127,218 shares of the airline’s stock valued at $4,150,000 after acquiring an additional 9,739 shares during the period. Finally, Gradient Investments LLC increased its holdings in Southwest Airlines by 5.4% in the 3rd quarter. Gradient Investments LLC now owns 578,088 shares of the airline’s stock worth $18,447,000 after acquiring an additional 29,665 shares in the last quarter. Hedge funds and other institutional investors own 80.82% of the company’s stock.

Southwest Airlines Stock Performance

The company has a market cap of $26.62 billion, a P/E ratio of 64.50, a PEG ratio of 0.36 and a beta of 1.15. The business’s 50 day simple moving average is $44.66 and its 200 day simple moving average is $36.73. 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 posted its quarterly earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share for the quarter, topping analysts’ consensus estimates of $0.56 by $0.02. The business had revenue of $7.44 billion during the quarter, compared to analyst estimates of $7.51 billion. Southwest Airlines had a net margin of 1.57% and a return on equity of 6.18%. The company’s revenue was up 7.4% on a year-over-year basis. During the same period in the prior year, the business posted $0.56 earnings per share. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. Sell-side analysts predict that Southwest Airlines Co. will post 1.55 earnings per share for the current fiscal year.

Southwest Airlines Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, April 2nd. Shareholders of record on Thursday, March 12th will be issued a dividend of $0.18 per share. The ex-dividend date of this dividend is Thursday, March 12th. This represents a $0.72 dividend on an annualized basis and a yield of 1.3%. Southwest Airlines’s dividend payout ratio (DPR) is currently 85.71%.

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.