Southwest Airlines (NYSE:LUV) Shares Gap Up – Should You Buy?

Southwest Airlines Co. (NYSE:LUV)’s share price gapped up before the market opened on Friday . The stock had previously closed at $40.63, but opened at $43.34. Southwest Airlines shares last traded at $44.39, with a volume of 1,569,519 shares changing hands.

Wall Street Analysts Forecast Growth

A number of research firms recently commented on LUV. Seaport Research Partners increased their target price on Southwest Airlines from $57.00 to $58.00 in a research note on Thursday, January 29th. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Southwest Airlines in a research note on Friday, March 27th. Evercore upped their price objective on Southwest Airlines from $40.00 to $45.00 and gave the stock an “in-line” rating in a report on Thursday, January 29th. Citigroup reduced their price objective on Southwest Airlines from $54.00 to $44.00 and set a “neutral” rating on the stock in a research report on Friday, March 20th. Finally, The Goldman Sachs Group decreased their price objective on Southwest Airlines from $32.00 to $30.00 and set a “sell” rating on the stock in a report on Wednesday, April 1st. Eight equities research analysts have rated the stock with a Buy rating, eight have given a Hold rating and four have assigned a Sell rating to the company’s stock. According to data from MarketBeat, the company currently has an average rating of “Hold” and an average target price of $43.72.

Southwest Airlines Stock Up 5.0%

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 stock has a market capitalization of $20.96 billion, a PE ratio of 50.80, a PEG ratio of 0.46 and a beta of 1.19. The company has a 50 day moving average price of $43.95 and a 200-day moving average price of $39.98.

Southwest Airlines (NYSE:LUV) last announced its quarterly earnings results on Wednesday, January 28th. The airline reported $0.58 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 analyst estimates of $7.51 billion. Southwest Airlines had a return on equity of 6.18% and a net margin of 1.57%.The firm’s revenue was up 7.4% on a year-over-year basis. During the same quarter last year, the firm 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. As a group, analysts forecast that Southwest Airlines Co. will post 1.55 earnings per share for the current fiscal year.

Southwest Airlines Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Thursday, April 2nd. Stockholders of record on Thursday, March 12th were given a $0.18 dividend. This represents a $0.72 annualized dividend and a dividend yield of 1.7%. The ex-dividend date of this dividend was Thursday, March 12th. Southwest Airlines’s dividend payout ratio (DPR) is currently 85.71%.

Hedge Funds Weigh In On Southwest Airlines

A number of institutional investors have recently bought and sold shares of the stock. SHP Wealth Management purchased a new stake in Southwest Airlines in the fourth quarter worth about $25,000. GHP Investment Advisors Inc. purchased a new position in shares of Southwest Airlines during the 4th quarter worth approximately $26,000. Entrust Financial LLC bought a new position in shares of Southwest Airlines in the 4th quarter worth approximately $26,000. Los Angeles Capital Management LLC bought a new position in shares of Southwest Airlines in the 4th quarter worth approximately $26,000. Finally, Optima Capital LLC purchased a new position in shares of Southwest Airlines in the 4th quarter valued at approximately $27,000. 80.82% of the stock is owned by institutional investors.

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.