Southwest Airlines (NYSE:LUV) Hits New 12-Month High After Better-Than-Expected Earnings

Southwest Airlines Co. (NYSE:LUV) hit a new 52-week high on Thursday after the company announced better than expected quarterly earnings. The company traded as high as $46.14 and last traded at $45.7610, with a volume of 8915267 shares. The stock had previously closed at $40.86.

The airline reported $0.58 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.56 by $0.02. Southwest Airlines had a net margin of 1.38% and a return on equity of 6.39%. The firm had revenue of $7.44 billion for the quarter, compared to the consensus estimate of $7.51 billion. During the same period last year, the firm earned $0.56 earnings per share. The company’s quarterly revenue 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.

Southwest Airlines Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Friday, January 16th. Shareholders of record on Friday, December 26th were given a dividend of $0.18 per share. The ex-dividend date was Friday, December 26th. This represents a $0.72 dividend on an annualized basis and a yield of 1.6%. Southwest Airlines’s dividend payout ratio is currently 110.77%.

Key Headlines Impacting Southwest Airlines

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

• Positive Sentiment: Management set 2026 adjusted EPS guidance of at least $4.00 — well above Street expectations — citing revenue initiatives and cost control as drivers; this is the primary catalyst lifting the stock. SOUTHWEST AIRLINES REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS; EXPECTS STRONG 2026 FINANCIAL PERFORMANCE FROM BUSINESS TRANSFORMATION
• Positive Sentiment: Company-wide changes — ending open seating, introducing assigned seats and baggage fees — are already contributing to revenue uplift in management’s commentary and analyst writeups, supporting the higher 2026 profit outlook. Southwest Airlines forecasts surge in 2026 profits after new seat, bag fees take hold
• Positive Sentiment: Q4 results: EPS marginally beat estimates and revenue grew ~7.4% y/y — evidence that revenue initiatives and cost control improved margins versus last year. These beat-and-guide dynamics helped lift sentiment. Southwest Airlines (LUV) Surpasses Q4 Earnings Estimates
• Positive Sentiment: Analyst moves: a few firms raised or refreshed targets/ratings after the results and guidance (e.g., Jefferies and Evercore/coverage notes), which provides incremental validation for the turnaround thesis. Analyst coverage and price-target commentary
• Neutral Sentiment: Equity research/strategy pieces (e.g., Zacks) highlight LUV as a value/growth combination given the pivot to higher-margin products; useful framing but not new company-level data. Here’s Why Southwest Airlines (LUV) is a Strong Value Stock
• Negative Sentiment: Near-term caution: Q1 2026 EPS guidance of roughly $0.45 is below consensus (~$0.57), signaling some front-loaded investments or seasonality that could pressure short-term results. SOUTHWEST AIRLINES REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS; EXPECTS STRONG 2026 FINANCIAL PERFORMANCE FROM BUSINESS TRANSFORMATION
• Negative Sentiment: Options activity: an unusual spike in put buying suggests some investors are hedging or betting on near-term downside, which can add volatility even as fundamentals improve.

Wall Street Analyst Weigh In

LUV has been the subject of several recent research reports. Sanford C. Bernstein increased their price target on Southwest Airlines from $31.00 to $34.00 and gave the company a “market perform” rating in a report on Thursday, November 20th. JPMorgan Chase & Co. upgraded shares of Southwest Airlines from an “underweight” rating to an “overweight” rating and lifted their price objective for the company from $36.00 to $60.00 in a report on Friday, January 9th. The Goldman Sachs Group upped their target price on shares of Southwest Airlines from $26.00 to $29.00 and gave the stock a “sell” rating in a research note on Tuesday, January 13th. Seaport Research Partners raised their price objective on shares of Southwest Airlines from $46.00 to $52.00 and gave the company a “buy” rating in a report on Friday, January 9th. Finally, Morgan Stanley raised their price objective on shares of Southwest Airlines from $48.00 to $50.00 and gave the stock an “overweight” rating in a report on Thursday, January 8th. Six analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and four have given a Sell rating to the company’s stock. According to MarketBeat, the company currently has an average rating of “Hold” and an average target price of $42.63.

Institutional Trading of Southwest Airlines

Institutional investors and hedge funds have recently bought and sold shares of the business. AQR Capital Management LLC grew its position in Southwest Airlines by 100.6% in the first quarter. AQR Capital Management LLC now owns 39,347 shares of the airline’s stock valued at $1,303,000 after acquiring an additional 19,729 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its holdings in shares of Southwest Airlines by 5.4% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 61,060 shares of the airline’s stock valued at $2,050,000 after purchasing an additional 3,141 shares during the last quarter. Empowered Funds LLC increased its holdings in shares of Southwest Airlines by 7.6% in the 1st quarter. Empowered Funds LLC now owns 7,459 shares of the airline’s stock worth $250,000 after acquiring an additional 527 shares during the period. Farther Finance Advisors LLC increased its position in Southwest Airlines by 54.9% in the 2nd quarter. Farther Finance Advisors LLC now owns 5,996 shares of the airline’s stock valued at $195,000 after acquiring an additional 2,125 shares during the period. Finally, Janney Montgomery Scott LLC boosted its holdings in shares of Southwest Airlines by 11.0% in the second quarter. Janney Montgomery Scott LLC now owns 11,498 shares of the airline’s stock valued at $373,000 after acquiring an additional 1,136 shares in the last quarter. Institutional investors and hedge funds own 80.82% of the company’s stock.

Southwest Airlines Trading Up 12.5%

The company has a debt-to-equity ratio of 0.52, a current ratio of 0.49 and a quick ratio of 0.42. The stock has a market capitalization of $23.78 billion, a price-to-earnings ratio of 70.40, a price-to-earnings-growth ratio of 0.37 and a beta of 1.16. The business has a fifty day moving average of $40.07 and a 200-day moving average of $35.05.

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.