Southwest Airlines (NYSE:LUV) Hits New 1-Year High After Analyst Upgrade

Shares of Southwest Airlines Co. (NYSE:LUV) hit a new 52-week high during trading on Friday after Susquehanna raised their price target on the stock from $35.00 to $45.00. Susquehanna currently has a neutral rating on the stock. Southwest Airlines traded as high as $44.69 and last traded at $44.6870, with a volume of 114496 shares trading hands. The stock had previously closed at $42.92.

LUV has been the subject of several other research reports. Raymond James Financial upped their target price on shares of Southwest Airlines from $42.00 to $49.00 and gave the stock an “outperform” rating in a research note on Friday, December 19th. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Southwest Airlines in a research report on Monday, December 29th. TD Cowen increased their price objective on shares of Southwest Airlines from $31.00 to $42.00 and gave the company a “hold” rating in a research note on Friday, December 12th. Deutsche Bank Aktiengesellschaft boosted their target price on Southwest Airlines from $40.00 to $48.00 and gave the stock a “buy” rating in a research note on Friday, December 12th. Finally, Morgan Stanley upped their target price on Southwest Airlines from $38.00 to $48.00 and gave the company an “overweight” rating in a report on Monday, December 8th. Six research analysts have rated the stock with a Buy rating, twelve have issued a Hold rating and three have given a Sell rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of “Hold” and an average price target of $42.11.

Key Headlines Impacting Southwest Airlines

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

• Positive Sentiment: Rare double-upgrade from JPMorgan — JPMorgan upgraded LUV from underweight to overweight and lifted its price target to $60, a large upward move that traders say is the main catalyst for the rally as it signals materially higher earnings expectations. Barron’s: Rare Double Upgrade
• Positive Sentiment: Multiple price-target raises — Citi and UBS both bumped targets (Citi to $44, UBS to $45), reinforcing the analyst trend higher and supporting upside in the stock as models are re-priced for better forward earnings. Citi price target raise
• Positive Sentiment: Broader analyst optimism — Citigroup and other firms published bullish commentary forecasting notable price appreciation based on improving fundamentals and potential margin recovery. Citigroup forecast
• Neutral Sentiment: Susquehanna raised its target to $45 but kept a “neutral” rating — the higher target supports the rally but the retained rating tempers how decisive the firm views near-term upside. Benzinga: Susquehanna note
• Neutral Sentiment: Strategic/cabin changes under review — articles on Southwest’s cabin revamp and assigned seating argue these initiatives could reshape unit revenue and customer experience, but benefits depend on execution and timing. Yahoo: Cabin revamp
• Neutral Sentiment: New marketing/partnerships — a legacy partnership with the Chicago Cubs is positive PR and revenue/brand-supportive, but unlikely to move near-term fundamentals materially. MLB press release
• Neutral Sentiment: Mixed analyst landscape — several firms remain cautious/hold-rated (e.g., Wells Fargo), so while sentiment is tilting positive, coverage is not uniformly bullish. Wells Fargo hold

Institutional Trading of Southwest Airlines

Hedge funds have recently made changes to their positions in the company. Arrowstreet Capital Limited Partnership grew its stake in shares of Southwest Airlines by 2,403.8% during the 2nd quarter. Arrowstreet Capital Limited Partnership now owns 10,120,368 shares of the airline’s stock worth $328,305,000 after acquiring an additional 9,716,160 shares during the period. Ameriprise Financial Inc. lifted its holdings in Southwest Airlines by 43.7% during the third quarter. Ameriprise Financial Inc. now owns 12,335,167 shares of the airline’s stock valued at $393,615,000 after purchasing an additional 3,753,183 shares during the last quarter. SG Americas Securities LLC boosted its position in Southwest Airlines by 2,468.4% during the fourth quarter. SG Americas Securities LLC now owns 3,752,352 shares of the airline’s stock worth $155,085,000 after purchasing an additional 3,606,255 shares during the period. CIBC Bancorp USA Inc. purchased a new position in shares of Southwest Airlines in the third quarter worth about $62,340,000. Finally, JPMorgan Chase & Co. raised its position in shares of Southwest Airlines by 13.6% in the third quarter. JPMorgan Chase & Co. now owns 12,218,086 shares of the airline’s stock valued at $389,879,000 after purchasing an additional 1,459,235 shares during the period. 80.82% of the stock is currently owned by institutional investors.

Southwest Airlines Stock Up 3.6%

The stock’s 50 day moving average is $37.32 and its 200 day moving average is $34.26. The company has a market capitalization of $22.99 billion, a PE ratio of 68.39, a PEG ratio of 0.27 and a beta of 1.16. The company has a debt-to-equity ratio of 0.52, a quick ratio of 0.42 and a current ratio of 0.49.

Southwest Airlines (NYSE:LUV) last released its quarterly earnings data on Tuesday, February 6th. The airline reported ($0.38) earnings per share for the quarter. The business had revenue of $6.17 billion during the quarter. Southwest Airlines had a net margin of 1.38% and a return on equity of 6.39%. On average, sell-side analysts anticipate that Southwest Airlines Co. will post 1.55 EPS for the current fiscal year.

Southwest Airlines Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, January 16th. Investors of record on Friday, December 26th will be paid a dividend of $0.18 per share. This represents a $0.72 dividend on an annualized basis and a dividend yield of 1.6%. The ex-dividend date is Friday, December 26th. Southwest Airlines’s payout ratio is presently 110.77%.

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.