Morgan Stanley Forecasts Strong Price Appreciation for Southwest Airlines (NYSE:LUV) Stock

Southwest Airlines (NYSE:LUV) had its target price hoisted by stock analysts at Morgan Stanley from $50.00 to $55.00 in a research report issued to clients and investors on Friday,Benzinga reports. The brokerage presently has an “overweight” rating on the airline’s stock. Morgan Stanley’s price objective would indicate a potential upside of 15.77% from the stock’s current price.

A number of other equities analysts also recently weighed in on LUV. Barclays raised shares of Southwest Airlines from an “equal weight” rating to an “overweight” rating and increased their price target for the stock from $34.00 to $56.00 in a research note on Tuesday, December 16th. Seaport Research Partners upped their price objective on Southwest Airlines from $46.00 to $52.00 and gave the stock a “buy” rating in a report on Friday, January 9th. TD Cowen lifted their target price on Southwest Airlines from $42.00 to $50.00 and gave the company a “hold” rating in a report on Friday. BMO Capital Markets raised Southwest Airlines from a “market perform” rating to an “outperform” rating and boosted their price target for the company from $43.00 to $57.50 in a research report on Friday. Finally, Jefferies Financial Group upped their price target on Southwest Airlines from $42.00 to $45.00 and gave the stock a “hold” rating in a research note on Monday, January 26th. Seven investment analysts have rated the stock with a Buy rating, ten have given a Hold rating and four have given a Sell rating to the company. According to data from MarketBeat.com, Southwest Airlines presently has an average rating of “Hold” and a consensus target price of $44.76.

Southwest Airlines Stock Performance

Shares of LUV opened at $47.51 on Friday. The company has a market capitalization of $24.57 billion, a price-to-earnings ratio of 56.56, a PEG ratio of 0.44 and a beta of 1.16. The company has a debt-to-equity ratio of 0.57, a quick ratio of 0.42 and a current ratio of 0.52. Southwest Airlines has a 1 year low of $23.82 and a 1 year high of $49.85. The company’s 50 day simple moving average is $40.71 and its 200 day simple moving average is $35.20.

Southwest Airlines (NYSE:LUV) last released its earnings results on Wednesday, January 28th. The airline reported $0.58 EPS for the quarter, beating the consensus estimate of $0.56 by $0.02. Southwest Airlines had a return on equity of 6.18% and a net margin of 1.57%.The firm had revenue of $7.44 billion during the quarter, compared to analyst estimates of $7.51 billion. During the same period in the prior year, the firm posted $0.56 earnings per share. The business’s quarterly revenue was up 7.4% compared to the same quarter last year. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. On average, sell-side analysts predict that Southwest Airlines will post 1.55 EPS for the current year.

Hedge Funds Weigh In On Southwest Airlines

Institutional investors and hedge funds have recently bought and sold shares of the stock. Citizens Financial Group Inc. RI purchased a new stake in shares of Southwest Airlines during the fourth quarter valued at approximately $233,000. Wealthfront Advisers LLC grew its holdings in Southwest Airlines by 19.1% during the 4th quarter. Wealthfront Advisers LLC now owns 32,317 shares of the airline’s stock valued at $1,336,000 after purchasing an additional 5,181 shares in the last quarter. M&T Bank Corp grew its holdings in Southwest Airlines by 9.4% during the 4th quarter. M&T Bank Corp now owns 92,569 shares of the airline’s stock valued at $3,827,000 after purchasing an additional 7,927 shares in the last quarter. Ashton Thomas Private Wealth LLC lifted its holdings in Southwest Airlines by 3.0% in the 4th quarter. Ashton Thomas Private Wealth LLC now owns 19,513 shares of the airline’s stock worth $810,000 after buying an additional 572 shares in the last quarter. Finally, D.A. Davidson & CO. lifted its holdings in Southwest Airlines by 6.9% in the 4th quarter. D.A. Davidson & CO. now owns 9,511 shares of the airline’s stock worth $393,000 after buying an additional 610 shares in the last quarter. 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: Management issued robust FY‑2026 guidance (at least $4.00 adjusted EPS) and signaled material upside from new seat/ancillary fees — the guidance and new revenue levers are the main driver of recent upside. Q4 Earnings Highlights
• Positive Sentiment: Q4 results beat EPS estimates ($0.58 vs. $0.56) which reinforced confidence in the recovery and margin improvement. Earnings Beat
• Positive Sentiment: Multiple bullish analyst moves raised upside expectations — Morgan Stanley to $55 (overweight), BMO upgraded to outperform with $57.50, Wells Fargo and TD Cowen lifted targets toward $50 — these upgrades support the stock’s upside narrative. Analyst Coverage
• Neutral Sentiment: Industry and stock‑screen pieces (Zacks, Seeking Alpha) compare LUV to peers and discuss valuation; helpful for context but less likely to drive immediate moves. Peer Comparison
• Negative Sentiment: Near‑term guidance is mixed: Q1 EPS guidance of ~$0.45 came in below Street estimates, and revenue trends in the quarter lagged expectations — a near‑term headwind for sentiment. Guidance & Results
• Negative Sentiment: Some large firms remain bearish or cautious despite raising targets — Goldman Sachs raised its PT to $32 but maintains a “sell” rating, and Bank of America kept an “underperform” stance with a $42 PT — these lower‑PT calls can cap rallies and prompt profit‑taking. Goldman / BofA Notes

Southwest Airlines Company Profile

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.