Southwest Airlines (NYSE:LUV) Cut to “Hold” at Zacks Research

Zacks Research downgraded shares of Southwest Airlines (NYSE:LUV) from a strong-buy rating to a hold rating in a report issued on Wednesday,Zacks.com reports. Zacks Research also issued estimates for Southwest Airlines’ FY2028 earnings at $5.00 EPS.

Other research analysts have also recently issued research reports about the stock. Wall Street Zen upgraded shares of Southwest Airlines from a “hold” rating to a “buy” rating in a report on Saturday, February 7th. Morgan Stanley raised their price objective on shares of Southwest Airlines from $50.00 to $55.00 and gave the company an “overweight” rating in a report on Friday, January 30th. BMO Capital Markets raised shares of Southwest Airlines from a “market perform” rating to an “outperform” rating and lifted their price objective for the stock from $43.00 to $57.50 in a research report on Friday, January 30th. Evercore boosted their target price on shares of Southwest Airlines from $40.00 to $45.00 and gave the stock an “in-line” rating in a research note on Thursday, January 29th. Finally, The Goldman Sachs Group increased their target price on Southwest Airlines from $29.00 to $32.00 and gave the company a “sell” rating in a report on Friday, January 30th. Eight investment analysts have rated the stock with a Buy rating, nine have issued a Hold rating and four have given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Hold” and a consensus price target of $47.34.

Southwest Airlines Price Performance

LUV stock opened at $38.77 on Wednesday. The business’s 50-day moving average is $46.67 and its two-hundred day moving average is $38.66. The company has a debt-to-equity ratio of 0.57, a current ratio of 0.52 and a quick ratio of 0.45. The firm has a market capitalization of $19.05 billion, a P/E ratio of 46.15, a P/E/G ratio of 0.28 and a beta of 1.10. Southwest Airlines has a 1 year low of $23.82 and a 1 year high of $55.11.

Southwest Airlines (NYSE:LUV) last announced its quarterly earnings data on Wednesday, January 28th. The airline reported $0.58 EPS for the quarter, topping analysts’ consensus estimates of $0.56 by $0.02. Southwest Airlines had a return on equity of 6.18% and a net margin of 1.57%.The business had revenue of $7.44 billion during the quarter, compared to the consensus estimate of $7.51 billion. During the same period in the previous year, the company posted $0.56 earnings per share. The business’s revenue for the quarter was up 7.4% on a year-over-year basis. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. Analysts anticipate that Southwest Airlines 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. Investors of record on Thursday, March 12th will be paid a dividend of $0.18 per share. The ex-dividend date is Thursday, March 12th. This represents a $0.72 dividend on an annualized basis and a yield of 1.9%. Southwest Airlines’s dividend payout ratio is currently 85.71%.

Institutional Investors Weigh In On Southwest Airlines

A number of institutional investors and hedge funds have recently made changes to their positions in the business. Arrowstreet Capital Limited Partnership boosted its stake in shares of Southwest Airlines by 2,403.8% during the second quarter. Arrowstreet Capital Limited Partnership now owns 10,120,368 shares of the airline’s stock worth $328,305,000 after buying an additional 9,716,160 shares during the period. Norges Bank acquired a new position in Southwest Airlines in the 4th quarter valued at about $172,038,000. Ameriprise Financial Inc. increased its position in Southwest Airlines by 43.7% in the 3rd quarter. Ameriprise Financial Inc. now owns 12,335,167 shares of the airline’s stock valued at $393,615,000 after acquiring an additional 3,753,183 shares during the period. SG Americas Securities LLC lifted its position in Southwest Airlines by 2,468.4% during the 4th quarter. SG Americas Securities LLC now owns 3,752,352 shares of the airline’s stock worth $155,085,000 after acquiring an additional 3,606,255 shares during the period. Finally, Massachusetts Financial Services Co. MA acquired a new stake in Southwest Airlines during the 4th quarter worth approximately $143,450,000. 80.82% of the stock is owned by hedge funds and other institutional investors.

Key Headlines Impacting Southwest Airlines

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

• Positive Sentiment: Unusual call buying — Traders purchased roughly 49,224 LUV calls (about a 104% jump vs. typical daily call volume), which suggests short-term bullish speculative activity or hedging that can support the share price.
• Neutral Sentiment: Valuation pieces highlight recent share weakness and longer-term gains — Coverage notes LUV has declined in the past month and 3 months, prompting fresh valuation discussion even as 1‑year returns remain strong; these analyses may attract bargain hunters or prompt more selling depending on investor view. Assessing Southwest Airlines (LUV) Valuation After Recent Share Price Weakness
• Neutral Sentiment: Price-target and thematic pieces summarize street views for 2026 — Roundups of Wall Street price predictions and longer-term outlooks provide context but don’t move fundamentals immediately. Southwest Price Prediction: What Wall Street Thinks LUV Is Worth in 2026
• Neutral Sentiment: Redburn raised its price target to $35 but kept a Sell rating — mixed signal: a higher target is constructive while the Sell stance keeps downside narrative alive. Southwest Airlines Co. (LUV) Target Increased to $35 at Redburn Despite Sell Rating
• Negative Sentiment: Southwest will end service at Chicago O’Hare and Washington Dulles — exits from two major airports shrink network reach and could reduce revenue or market share in those metros, raising near-term growth concerns. Southwest Airlines ends service to Chicago’s O’Hare and Washington’s Dulles airports Southwest Airlines to end service at O’Hare, Dulles
• Negative Sentiment: Analyst downgrades and lower earnings estimates — Jefferies cut its price target to $41 (Hold) and Zacks moved LUV from Strong‑Buy to Hold while trimming FY2028 EPS — these reduce analyst support and can pressure sentiment. Southwest Airlines (NYSE:LUV) Price Target Lowered to $41.00 at Jefferies Financial Group Zacks.com
• Negative Sentiment: Oil spike and geopolitical risk — Coverage warns that oil returning toward $100/barrel amid the Iran conflict materially raises jet fuel costs and could compress margins across carriers; sector pain can drag LUV despite company-specific factors. Airline Stocks Were Pricing 2026 Like A Runway―Oil Just Made It A Cliff Edge Only 3 U.S. Airlines Can Remain Profitable at Current Oil Prices
• Negative Sentiment: Near-term selling pressure — multiple outlets noted shares sliding last week/month and premarket weakness tied to oil and supply concerns, which can amplify short-term volatility. Why Is Southwest Airlines Stock Sliding Thursday?

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.