Southwest Airlines (NYSE:LUV) Upgraded at BMO Capital Markets

BMO Capital Markets upgraded shares of Southwest Airlines (NYSE:LUV) from a market perform rating to an outperform rating in a report released on Friday, Marketbeat Ratings reports. The firm currently has $57.50 price objective on the airline’s stock, up from their prior price objective of $43.00.

Other equities analysts have also issued reports about the company. Raymond James Financial upped their target price on Southwest Airlines from $42.00 to $49.00 and gave the company an “outperform” rating in a report on Friday, December 19th. Susquehanna increased their target price on shares of Southwest Airlines from $35.00 to $45.00 and gave the company a “neutral” rating in a research report on Friday, January 9th. Bank of America lifted their price target on shares of Southwest Airlines from $28.00 to $37.00 and gave the stock an “underperform” rating in a report on Tuesday, January 6th. Sanford C. Bernstein upped their price objective on shares of Southwest Airlines from $31.00 to $34.00 and gave the company a “market perform” rating in a report on Thursday, November 20th. Finally, Deutsche Bank Aktiengesellschaft raised their price target on Southwest Airlines from $40.00 to $48.00 and gave the stock a “buy” rating in a report on Friday, December 12th. Seven research analysts have rated the stock with a Buy rating, ten have issued a Hold rating and four have issued a Sell rating to the company’s stock. According to data from MarketBeat, the company presently has a consensus rating of “Hold” and a consensus target price of $44.76.

Southwest Airlines Stock Performance

LUV stock opened at $47.51 on Friday. The firm has a market cap of $24.57 billion, a PE ratio of 56.56, a price-to-earnings-growth ratio of 0.37 and a beta of 1.15. Southwest Airlines has a 1-year low of $23.82 and a 1-year high of $49.85. The stock has a 50-day moving average price of $40.71 and a 200-day moving average price of $35.18. 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 (NYSE:LUV) last posted its quarterly earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share for the quarter, topping analysts’ consensus estimates 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 the consensus estimate of $7.51 billion. During the same period in the prior year, the business earned $0.56 EPS. The firm’s revenue for the quarter was up 7.4% on a year-over-year basis. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. As a group, equities research analysts expect that Southwest Airlines will post 1.55 earnings per share for the current year.

Southwest Airlines Dividend Announcement

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

Hedge Funds Weigh In On Southwest Airlines

Several institutional investors and hedge funds have recently bought and sold shares of the stock. GHP Investment Advisors Inc. purchased a new stake in Southwest Airlines during the 4th quarter valued at $26,000. Optima Capital LLC purchased a new position in shares of Southwest Airlines in the fourth quarter valued at about $27,000. Lodestone Wealth Management LLC bought a new position in shares of Southwest Airlines during the fourth quarter valued at about $29,000. Elevation Point Wealth Partners LLC bought a new position in shares of Southwest Airlines during the second quarter valued at about $25,000. Finally, Flagship Harbor Advisors LLC purchased a new stake in shares of Southwest Airlines during the fourth quarter worth about $35,000. 80.82% of the stock is currently owned by institutional investors.

Key Stories Impacting 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

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.