Southwest Airlines (NYSE:LUV) Releases FY 2026 Earnings Guidance

Southwest Airlines (NYSE:LUV) issued an update on its FY 2026 earnings guidance on Wednesday morning. The company provided EPS guidance of 4.000- for the period, compared to the consensus EPS estimate of 2.310. The company issued revenue guidance of -. Southwest Airlines also updated its Q1 2026 guidance to 0.450- EPS.

Analyst Ratings Changes

Several research analysts have recently commented on LUV shares. Deutsche Bank Aktiengesellschaft lifted 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. Weiss Ratings restated a “hold (c)” rating on shares of Southwest Airlines in a research report on Monday, December 29th. Morgan Stanley boosted their target price on shares of Southwest Airlines from $48.00 to $50.00 and gave the company an “overweight” rating in a report on Thursday, January 8th. Evercore ISI increased their price target on shares of Southwest Airlines from $35.00 to $40.00 in a research note on Friday, January 9th. Finally, Sanford C. Bernstein raised their price target 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. Six investment analysts have rated the stock with a Buy rating, eleven have given a Hold rating and four have given a Sell rating to the stock. According to MarketBeat, Southwest Airlines has a consensus rating of “Hold” and an average price target of $42.37.

Southwest Airlines Stock Down 1.0%

Southwest Airlines stock traded down $0.40 during mid-day trading on Wednesday, reaching $40.94. 10,555,389 shares of the company’s stock were exchanged, compared to its average volume of 8,640,491. The company has a quick ratio of 0.42, a current ratio of 0.49 and a debt-to-equity ratio of 0.52. Southwest Airlines has a twelve month low of $23.82 and a twelve month high of $45.02. The company has a market cap of $21.17 billion, a P/E ratio of 62.98, a P/E/G ratio of 0.38 and a beta of 1.16. The company has a fifty day moving average of $39.89 and a 200-day moving average of $35.01.

Southwest Airlines (NYSE:LUV) last announced its quarterly earnings data on Wednesday, January 28th. The airline reported $0.58 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.55 by $0.03. Southwest Airlines had a return on equity of 6.39% and a net margin of 1.38%.The business had revenue of $7.44 billion during the quarter, compared to analysts’ expectations of $7.51 billion. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. Sell-side analysts expect that Southwest Airlines will post 1.55 EPS for the current year.

Southwest Airlines Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Friday, January 16th. Shareholders of record on Friday, December 26th were given a $0.18 dividend. The ex-dividend date of this dividend was Friday, December 26th. This represents a $0.72 dividend on an annualized basis and a dividend yield of 1.8%. Southwest Airlines’s dividend payout ratio is currently 110.77%.

Southwest Airlines News Summary

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

• Positive Sentiment: Q4 EPS beat and improved profitability — Southwest reported Q4 EPS of $0.58, topping estimates and showing profit improvement versus prior year, supporting near-term earnings credibility. Article Title
• Positive Sentiment: Very strong FY2026 guidance — management guided to adjusted EPS of at least $4.00 for 2026 (vs. $0.93 adjusted in 2025), citing revenue initiatives and the business transformation; this materially raises forward-profit expectations. Article Title
• Positive Sentiment: Revenue initiatives — the shift from open seating to assigned seats plus new bag fees are being promoted as durable revenue levers that underpin the guidance and reframe Southwest’s unit economics. Article Title
• Neutral Sentiment: Revenue miss and mixed quarter — total revenue rose year-over-year to $7.44B but slightly missed consensus (~$7.51–7.59B), so top-line momentum is less clear even as margins improved. Article Title
• Neutral Sentiment: Analyst positioning — some firms are raising targets (Jefferies to $45) and others remain mixed, so Street views vary and price-target dispersion could sustain volatility. Article Title
• Negative Sentiment: Cash-flow and liquidity pressure — operating cash fell sharply and cash & equivalents declined materially YoY while capex rose, which could constrain flexibility if recovery stalls. Article Title
• Negative Sentiment: Elevated put-option activity — an unusual spike in put buying signals that some traders are hedging or betting on downside, which can increase intraday volatility. (No link available)

Institutional Trading of Southwest Airlines

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. Triumph Capital Management purchased a new stake in Southwest Airlines in the third quarter valued at $169,000. BOKF NA grew its holdings in shares of Southwest Airlines by 16.5% during the third quarter. BOKF NA now owns 7,762 shares of the airline’s stock worth $248,000 after purchasing an additional 1,101 shares during the last quarter. Diversify Advisory Services LLC increased its position in shares of Southwest Airlines by 10.6% during the third quarter. Diversify Advisory Services LLC now owns 7,523 shares of the airline’s stock worth $229,000 after purchasing an additional 721 shares in the last quarter. NewEdge Advisors LLC boosted its position in shares of Southwest Airlines by 22.4% in the 2nd quarter. NewEdge Advisors LLC now owns 5,118 shares of the airline’s stock valued at $166,000 after purchasing an additional 935 shares during the period. Finally, EverSource Wealth Advisors LLC grew its stake in Southwest Airlines by 73.4% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 5,690 shares of the airline’s stock worth $185,000 after buying an additional 2,408 shares during the last quarter. 80.82% of the stock is currently owned by institutional investors and hedge funds.

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.