Bank of America Has Lowered Expectations for Southwest Airlines (NYSE:LUV) Stock Price

Southwest Airlines (NYSE:LUV) had its price objective reduced by investment analysts at Bank of America from $42.00 to $40.00 in a research note issued on Wednesday,MarketScreener reports. The firm presently has an “underperform” rating on the airline’s stock. Bank of America‘s price target points to a potential upside of 6.23% from the company’s current price.

Several other analysts have also issued reports on LUV. UBS Group reduced their price objective on shares of Southwest Airlines from $59.00 to $56.00 and set a “buy” rating on the stock in a report on Monday, March 23rd. Raymond James Financial lifted their price target on shares of Southwest Airlines from $42.00 to $49.00 and gave the company an “outperform” rating in a research report on Friday, December 19th. Zacks Research downgraded shares of Southwest Airlines from a “strong-buy” rating to a “hold” rating in a research note on Wednesday, March 11th. Wells Fargo & Company decreased their price objective on shares of Southwest Airlines from $50.00 to $44.00 and set an “equal weight” rating on the stock in a report on Monday, March 16th. Finally, BMO Capital Markets raised shares of Southwest Airlines from a “market perform” rating to an “outperform” rating and increased their price objective for the stock from $43.00 to $57.50 in a research report on Friday, January 30th. Eight equities research analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and four have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the company has an average rating of “Hold” and an average price target of $43.72.

Southwest Airlines Stock Down 1.5%

Shares of NYSE LUV opened at $37.66 on Wednesday. The stock has a market cap of $18.49 billion, a PE ratio of 44.83, a P/E/G ratio of 0.29 and a beta of 1.19. 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 has a 12-month low of $23.82 and a 12-month high of $55.11. The company has a 50-day moving average of $45.61 and a 200 day moving average of $39.34.

Southwest Airlines (NYSE:LUV) last issued its earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share for the quarter, topping 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 business had revenue of $7.44 billion for the quarter, compared to analysts’ expectations of $7.51 billion. During the same period in the previous year, the firm posted $0.56 EPS. The business’s revenue for the quarter 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. As a group, sell-side analysts predict that Southwest Airlines will post 1.55 EPS for the current fiscal year.

Institutional Investors Weigh In On Southwest Airlines

Several institutional investors have recently modified their holdings of the company. Elevation Point Wealth Partners LLC purchased a new position in Southwest Airlines in the second quarter valued at $25,000. SHP Wealth Management purchased a new stake in Southwest Airlines during the 4th quarter worth about $25,000. GHP Investment Advisors Inc. purchased a new stake in Southwest Airlines during the 4th quarter worth about $26,000. Entrust Financial LLC acquired a new position in shares of Southwest Airlines during the 4th quarter worth about $26,000. Finally, Los Angeles Capital Management LLC acquired a new position in shares of Southwest Airlines during the 4th quarter worth about $26,000. 80.82% of the stock is owned by hedge funds and other institutional investors.

More Southwest Airlines News

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

• Positive Sentiment: Zacks highlights LUV as a “strong value stock,” arguing the shares look attractive on style/value metrics relative to the airline group, which could support longer-term upside for value-focused investors. Here’s Why Southwest Airlines (LUV) is a Strong Value Stock
• Positive Sentiment: Jefferies nudged its price target up slightly (from $41 to $42) and kept a Hold — a modest vote of stability that suggests some dealers see the hit as selectively priced-in rather than structural. Jefferies adjusts price target on Southwest Airlines to $42
• Neutral Sentiment: Bank of America and other analysts note that strong travel demand and the ability to raise fares could offset some of the margin pressure from higher fuel — but this is conditional and may not fully offset rapid fuel spikes. High Fuel Costs Weigh on Airlines but Demand May Offset Impact, BofA Says
• Neutral Sentiment: Several firms (BMO, Raymond James) trimmed price targets but kept Outperform ratings — a mixed signal: conviction in recovery remains, but near-term margin risk forces lower valuation. BMO lowers PT on Southwest to $45 Raymond James lowers PT on Southwest to $45
• Negative Sentiment: Jet fuel and crude prices have surged (reports of ~100% jet-fuel increases in some contexts), directly raising operating costs and weighing on airline margins — a core near-term negative for Southwest’s profitability. Jet fuel prices are up 100%, oil prices keep surging, and airlines are paying the price
• Negative Sentiment: Geopolitical comments about potential conflict with Iran have spooked markets and raised jet-fuel cost concerns, triggering broad airline sell-offs that include Southwest. This is a direct catalyst for today’s weakness. Airline Stocks Tumble as Trump’s Iran War Comments Spark Jet Fuel Cost Concerns
• Negative Sentiment: Multiple firms cut price targets and one notable sell rating (Goldman Sachs lowered its PT to $30 and maintains Sell); Bank of America also moved to Underperform — analyst downgrades add selling pressure and reduce conviction among institutional holders. Goldman lowers PT on Southwest to $30 (Sell) BofA lowers PT to $40 (Underperform)
• Negative Sentiment: Additional coverage notes tie the fuel spike directly to Southwest’s near-term cost outlook and possible margin compression; that macro-driven risk is the dominant near-term driver for investor sentiment. Airline Stocks Tumble as United (UAL) and Southwest (LUV) Face Soaring Jet Fuel Crisis

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.