Southwest Airlines (NYSE:LUV) Raised to Buy at UBS Group

Southwest Airlines (NYSE:LUV) was upgraded by analysts at UBS Group from a “neutral” rating to a “buy” rating in a research note issued on Tuesday, Marketbeat reports. The firm presently has a $73.00 target price on the airline’s stock, up from their prior target price of $51.00. UBS Group’s target price points to a potential upside of 33.51% from the company’s previous close.

Several other research analysts also recently weighed in on LUV. TD Cowen upped their target price on shares of Southwest Airlines from $42.00 to $50.00 and gave the stock a “hold” rating in a report on Friday, January 30th. The Goldman Sachs Group upped their price objective on Southwest Airlines from $29.00 to $32.00 and gave the stock a “sell” rating in a research note on Friday, January 30th. Seaport Research Partners lifted their target price on Southwest Airlines from $57.00 to $58.00 in a research note on Thursday, January 29th. Evercore upped their price target on 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, Raymond James Financial increased their price objective on shares of Southwest Airlines from $42.00 to $49.00 and gave the company an “outperform” rating in a report on Friday, December 19th. One equities research analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating, nine have given a Hold rating and three have issued a Sell rating to the company’s stock. Based on data from MarketBeat, the company currently has a consensus rating of “Hold” and a consensus price target of $48.14.

Southwest Airlines Stock Up 0.8%

NYSE LUV opened at $54.68 on Tuesday. The stock’s 50-day moving average price is $44.96 and its 200-day moving average price is $36.85. The company has a market capitalization of $26.86 billion, a P/E ratio of 65.09, a price-to-earnings-growth ratio of 0.39 and a beta of 1.15. The company has a quick ratio of 0.45, a current ratio of 0.52 and a debt-to-equity ratio of 0.57. Southwest Airlines has a 52 week low of $23.82 and a 52 week high of $55.11.

Southwest Airlines (NYSE:LUV) last released its earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.56 by $0.02. Southwest Airlines had a net margin of 1.57% and a return on equity of 6.18%. The company 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 EPS. The firm’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, equities research analysts predict that Southwest Airlines will post 1.55 earnings per share for the current year.

Institutional Trading of Southwest Airlines

A number of large investors have recently made changes to their positions in LUV. Franklin Resources Inc. raised its position in Southwest Airlines by 7.0% during the fourth quarter. Franklin Resources Inc. now owns 40,200,530 shares of the airline’s stock valued at $1,661,488,000 after purchasing an additional 2,626,853 shares during the period. Ameriprise Financial Inc. increased its position in shares of Southwest Airlines by 43.7% during the 3rd 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. JPMorgan Chase & Co. raised its holdings in Southwest Airlines by 13.6% during the 3rd quarter. JPMorgan Chase & Co. now owns 12,218,086 shares of the airline’s stock valued at $389,879,000 after buying an additional 1,459,235 shares during the period. Artisan Partners Limited Partnership lifted its position in Southwest Airlines by 0.9% in the second quarter. Artisan Partners Limited Partnership now owns 10,763,935 shares of the airline’s stock worth $349,182,000 after buying an additional 98,290 shares during the last quarter. Finally, Arrowstreet Capital Limited Partnership boosted its stake in 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. 80.82% of the stock is currently owned by institutional investors.

Southwest Airlines News Roundup

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

• Positive Sentiment: UBS upgraded LUV from Neutral to Buy and raised its 12‑month price target to $73 (from $51), citing meaningful earnings upside from new seating/fee initiatives. This upgrade is the primary catalyst for the rally. Southwest Airlines upgraded to ‘Buy’ by UBS, shares jump
• Positive Sentiment: UBS and other outlets highlight extra‑legroom seating and ancillary fee changes as incremental profit drivers — analysts expect meaningful per‑passenger revenue lift if rollout succeeds. Extra legroom to deliver extra profits for Southwest Airlines — UBS
• Positive Sentiment: Market reaction: multiple reports note a sizable intraday jump and LUV reaching a new 52‑week high as traders priced in the UBS call and follow‑on coverage. Southwest Airlines (NYSE:LUV) Hits New 52-Week High Following Analyst Upgrade
• Neutral Sentiment: Elevated intraday and premarket volume accompanied the move (reports from Benzinga/MSN), indicating momentum trading around the headlines rather than a slow fundamental re‑rating. What’s Going On With Southwest Airlines Stock On Tuesday?
• Neutral Sentiment: Company fundamentals remain mixed: a recent quarter showed a small EPS beat but revenue slightly below consensus and guidance for FY‑2026 that investors will watch as fee changes roll out (impact depends on execution and timing).
• Negative Sentiment: Risks: valuation is elevated (P/E above peers), and the upside hinges on successful implementation of seating/fee changes without customer backlash or slower uptake — execution risk could cap gains if assumptions disappoint.

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.