Stock Traders Purchase Large Volume of Call Options on Southwest Airlines (NYSE:LUV)

Southwest Airlines Co. (NYSE:LUV) was the target of some unusual options trading activity on Friday. Investors bought 36,182 call options on the company. This is an increase of approximately 83% compared to the typical volume of 19,747 call options.

Wall Street Analyst Weigh In

Several analysts have recently weighed in on the company. Evercore lifted their price objective on Southwest Airlines from $43.00 to $44.00 in a report on Friday, April 24th. BMO Capital Markets lowered their target price on shares of Southwest Airlines from $57.50 to $45.00 and set an “outperform” rating on the stock in a research note on Tuesday, March 31st. Argus decreased their price objective on Southwest Airlines from $55.00 to $45.00 and set a “buy” rating on the stock in a report on Friday, April 24th. UBS Group boosted their price target on Southwest Airlines from $49.00 to $53.00 and gave the company a “buy” rating in a research note on Tuesday, May 26th. Finally, Zacks Research cut Southwest Airlines from a “hold” rating to a “strong sell” rating in a report on Wednesday, May 27th. Nine analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and five have given a Sell rating to the stock. According to data from MarketBeat, Southwest Airlines presently has a consensus rating of “Hold” and an average target price of $44.21.

Institutional Trading of Southwest Airlines

A number of institutional investors have recently bought and sold shares of LUV. SHP Wealth Management bought a new position in shares of Southwest Airlines in the 4th quarter worth $25,000. GHP Investment Advisors Inc. bought a new stake in Southwest Airlines in the fourth quarter valued at about $26,000. Entrust Financial LLC acquired a new position in Southwest Airlines in the fourth quarter valued at about $26,000. Los Angeles Capital Management LLC acquired a new position in Southwest Airlines in the fourth quarter valued at about $26,000. Finally, Optima Capital LLC acquired a new position in shares of Southwest Airlines during the 4th quarter worth about $27,000. Institutional investors and hedge funds own 80.82% of the company’s stock.

Southwest Airlines Price Performance

Shares of LUV stock traded up $1.21 during trading hours on Friday, hitting $45.50. 6,509,325 shares of the company’s stock were exchanged, compared to its average volume of 5,972,464. The stock’s 50-day moving average is $40.31 and its 200-day moving average is $42.21. The company has a debt-to-equity ratio of 0.66, a current ratio of 0.48 and a quick ratio of 0.41. Southwest Airlines has a 52 week low of $28.98 and a 52 week high of $55.11. The stock has a market cap of $22.24 billion, a price-to-earnings ratio of 29.36, a price-to-earnings-growth ratio of 0.48 and a beta of 1.15.

Southwest Airlines (NYSE:LUV) last issued its quarterly earnings data on Wednesday, April 22nd. The airline reported $0.45 EPS for the quarter, hitting analysts’ consensus estimates of $0.45. Southwest Airlines had a net margin of 2.83% and a return on equity of 10.66%. The firm had revenue of $7.25 billion for the quarter, compared to analyst estimates of $8.46 billion. During the same quarter in the prior year, the firm earned ($0.13) EPS. The company’s revenue was up 12.8% on a year-over-year basis. Southwest Airlines has set its Q2 2026 guidance at 0.350-0.650 EPS. As a group, research analysts forecast that Southwest Airlines will post 2.81 EPS for the current year.

Southwest Airlines Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, July 2nd. Stockholders of record on Thursday, June 11th will be paid a $0.18 dividend. This represents a $0.72 annualized dividend and a dividend yield of 1.6%. The ex-dividend date of this dividend is Thursday, June 11th. Southwest Airlines’s dividend payout ratio (DPR) is 46.45%.

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.