Southwest Airlines (NYSE:LUV) Sets New 12-Month High on Strong Earnings

Southwest Airlines Co. (NYSE:LUV) reached a new 52-week high during trading on Thursday following a better than expected earnings announcement. The company traded as high as $46.14 and last traded at $45.7610, with a volume of 8915267 shares changing hands. The stock had previously closed at $40.86.

The airline reported $0.58 EPS for the quarter, topping analysts’ consensus estimates of $0.56 by $0.02. The company had revenue of $7.44 billion for the quarter, compared to analysts’ expectations of $7.51 billion. Southwest Airlines had a net margin of 1.57% and a return on equity of 6.18%. The firm’s revenue was up 7.4% compared to the same quarter last year. During the same quarter last year, the business earned $0.56 EPS. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS.

Southwest Airlines Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, January 16th. Investors of record on Friday, December 26th were issued a $0.18 dividend. The ex-dividend date of this dividend was Friday, December 26th. This represents a $0.72 annualized dividend and a yield of 1.5%. Southwest Airlines’s dividend payout ratio is currently 85.71%.

Trending Headlines about Southwest Airlines

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

Analyst Upgrades and Downgrades

LUV has been the topic of several research analyst reports. Raymond James Financial boosted their price objective on Southwest Airlines from $42.00 to $49.00 and gave the company an “outperform” rating in a research report on Friday, December 19th. Barclays raised Southwest Airlines from an “equal weight” rating to an “overweight” rating and lifted their target price for the company from $34.00 to $56.00 in a research note on Tuesday, December 16th. BMO Capital Markets upgraded Southwest Airlines from a “market perform” rating to an “outperform” rating and upped their price target for the stock from $43.00 to $57.50 in a research note on Friday. Seaport Research Partners lifted their price objective on shares of Southwest Airlines from $57.00 to $58.00 in a research report on Thursday. Finally, Sanford C. Bernstein boosted their target price on shares of Southwest Airlines from $31.00 to $34.00 and gave the stock a “market perform” rating in a report on Thursday, November 20th. Seven investment analysts have rated the stock with a Buy rating, ten have issued a Hold rating and four have given a Sell rating to the company. According to data from MarketBeat.com, the company currently has an average rating of “Hold” and an average target price of $44.76.

Institutional Investors Weigh In On Southwest Airlines

Several large investors have recently bought and sold shares of LUV. Elevation Point Wealth Partners LLC purchased a new position in shares of Southwest Airlines in the 2nd quarter worth $25,000. GHP Investment Advisors Inc. purchased a new position in Southwest Airlines in the fourth quarter worth about $26,000. Corsicana & Co. bought a new stake in Southwest Airlines during the third quarter worth approximately $27,000. Quent Capital LLC purchased a new stake in Southwest Airlines during the third quarter valued at approximately $27,000. Finally, Optima Capital LLC purchased a new stake in Southwest Airlines during the fourth quarter valued at approximately $27,000. Institutional investors own 80.82% of the company’s stock.

Southwest Airlines Trading Down 2.0%

The stock has a market cap of $24.57 billion, a PE 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. The stock has a fifty day moving average price of $40.71 and a 200 day moving average price of $35.21.

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.