Southwest Airlines (NYSE:LUV) Stock Price Up 6.4% Following Analyst Upgrade

Southwest Airlines Co. (NYSE:LUV)’s stock price traded up 6.4% on Tuesday after UBS Group upgraded the stock from a neutral rating to a buy rating. UBS Group now has a $73.00 price target on the stock, up from their previous price target of $51.00. Southwest Airlines traded as high as $54.32 and last traded at $54.4030. 4,956,862 shares were traded during trading, a decline of 52% from the average session volume of 10,257,155 shares. The stock had previously closed at $51.11.

Several other brokerages have also recently weighed in on LUV. Raymond James Financial raised their price target on shares of Southwest Airlines from $42.00 to $49.00 and gave the stock an “outperform” rating in a report on Friday, December 19th. The Goldman Sachs Group increased their target price on shares of Southwest Airlines from $29.00 to $32.00 and gave the stock a “sell” rating in a report on Friday, January 30th. TD Cowen boosted their price target on Southwest Airlines from $42.00 to $50.00 and gave the company a “hold” rating in a report on Friday, January 30th. Wall Street Zen upgraded Southwest Airlines from a “hold” rating to a “buy” rating in a report on Saturday, February 7th. Finally, Citigroup boosted their target price on Southwest Airlines from $44.00 to $54.00 in a research note on Tuesday, February 3rd. One equities research analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating, nine have issued a Hold rating and three have given a Sell rating to the company. Based on data from MarketBeat, the company has an average rating of “Hold” and an average target price of $48.14.

Trending Headlines about Southwest Airlines

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.

Hedge Funds Weigh In On Southwest Airlines

A number of institutional investors have recently added to or reduced their stakes in the company. Cibc World Market Inc. boosted its stake in Southwest Airlines by 12.6% during the 3rd quarter. Cibc World Market Inc. now owns 1,916,003 shares of the airline’s stock valued at $61,140,000 after purchasing an additional 214,092 shares during the last quarter. RWA Wealth Partners LLC bought a new position in shares of Southwest Airlines during the second quarter valued at $1,652,000. Hussman Strategic Advisors Inc. purchased a new stake in shares of Southwest Airlines during the third quarter valued at $2,010,000. Howard Capital Management Inc. increased its holdings in Southwest Airlines by 8.3% in the 2nd quarter. Howard Capital Management Inc. now owns 127,218 shares of the airline’s stock worth $4,150,000 after buying an additional 9,739 shares in the last quarter. Finally, Gradient Investments LLC raised its position in Southwest Airlines by 5.4% in the 3rd quarter. Gradient Investments LLC now owns 578,088 shares of the airline’s stock worth $18,447,000 after buying an additional 29,665 shares during the last quarter. Institutional investors own 80.82% of the company’s stock.

Southwest Airlines Stock Up 0.8%

The company’s 50 day simple moving average is $44.96 and its 200-day simple moving average is $36.85. The company has a current ratio of 0.52, a quick ratio of 0.45 and a debt-to-equity ratio of 0.57. The firm has a market cap of $26.86 billion, a P/E ratio of 65.09, a PEG ratio of 0.39 and a beta of 1.15.

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 firm had revenue of $7.44 billion during the quarter, compared to analyst estimates of $7.51 billion. Southwest Airlines had a net margin of 1.57% and a return on equity of 6.18%. The business’s revenue for the quarter was up 7.4% on a year-over-year basis. During the same period in the previous year, the business 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. Research analysts forecast that Southwest Airlines Co. will post 1.55 earnings per share for the current fiscal year.

Southwest Airlines Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, April 2nd. Stockholders of record on Thursday, March 12th will be paid a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a dividend yield of 1.3%. The ex-dividend date is Thursday, March 12th. Southwest Airlines’s dividend payout ratio (DPR) is 85.71%.

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.