Southwest Airlines (NYSE:LUV) Price Target Raised to $42.00 at Bank of America

Southwest Airlines (NYSE:LUV) had its price target hoisted by Bank of America from $37.00 to $42.00 in a report issued on Friday morning,Benzinga reports. They currently have an underperform rating on the airline’s stock.

A number of other brokerages also recently commented on LUV. Deutsche Bank Aktiengesellschaft upped their price objective on shares of Southwest Airlines from $40.00 to $48.00 and gave the company a “buy” rating in a research note on Friday, December 12th. UBS Group boosted their target price on Southwest Airlines from $43.00 to $45.00 and gave the stock a “neutral” rating in a report on Tuesday, January 6th. BMO Capital Markets upgraded shares of Southwest Airlines from a “market perform” rating to an “outperform” rating and upped their price target for the company from $43.00 to $57.50 in a report on Friday. TD Cowen raised their price objective on shares of Southwest Airlines from $42.00 to $50.00 and gave the stock a “hold” rating in a research note on Friday. Finally, Citigroup upped their price target on Southwest Airlines from $38.00 to $44.00 and gave the company a “neutral” rating in a report on Wednesday, January 7th. Seven analysts have rated the stock with a Buy rating, ten have given a Hold rating and four have issued a Sell rating to the company. According to MarketBeat.com, the company presently has an average rating of “Hold” and an average target price of $44.76.

Southwest Airlines Stock Down 2.0%

LUV stock opened at $47.51 on Friday. The company has a market capitalization of $24.57 billion, a price-to-earnings ratio of 56.56, a price-to-earnings-growth ratio of 0.44 and a beta of 1.16. The company has a current ratio of 0.52, a quick ratio of 0.42 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 $49.85. The firm’s 50-day moving average is $40.71 and its two-hundred day moving average is $35.21.

Southwest Airlines (NYSE:LUV) last issued its quarterly earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share for the quarter, beating analysts’ consensus estimates of $0.56 by $0.02. The company had revenue of $7.44 billion during the quarter, compared to the consensus estimate of $7.51 billion. Southwest Airlines had a net margin of 1.57% and a return on equity of 6.18%. Southwest Airlines’s revenue was up 7.4% on a year-over-year basis. During the same period in the prior year, the company 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. On average, analysts forecast that Southwest Airlines will post 1.55 earnings per share for the current fiscal year.

Southwest Airlines Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Friday, January 16th. Stockholders of record on Friday, December 26th were paid 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 1.5%. Southwest Airlines’s dividend payout ratio is 85.71%.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. RWA Wealth Partners LLC acquired a new position in shares of Southwest Airlines in the 2nd quarter worth approximately $1,652,000. Hussman Strategic Advisors Inc. bought a new stake in Southwest Airlines in the third quarter valued at $2,010,000. Howard Capital Management Inc. lifted its position in Southwest Airlines by 8.3% in the 2nd quarter. Howard Capital Management Inc. now owns 127,218 shares of the airline’s stock valued at $4,150,000 after purchasing an additional 9,739 shares during the last quarter. Gradient Investments LLC raised its holdings in shares of Southwest Airlines by 5.4% during the third quarter. Gradient Investments LLC now owns 578,088 shares of the airline’s stock valued at $18,447,000 after buying an additional 29,665 shares during the last quarter. Finally, Rhumbline Advisers boosted its position in Southwest Airlines by 30.1% during the 2nd quarter. Rhumbline Advisers now owns 1,406,652 shares of the airline’s stock worth $45,632,000 after acquiring an additional 325,030 shares during the period. 80.82% of the stock is currently owned by institutional investors.

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

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.