TD Cowen Increases Southwest Airlines (NYSE:LUV) Price Target to $50.00

Southwest Airlines (NYSE:LUV) had its price target hoisted by TD Cowen from $42.00 to $50.00 in a research report issued to clients and investors on Friday. The brokerage presently has a “hold” rating on the airline’s stock. TD Cowen’s target price suggests a potential upside of 3.23% from the stock’s current price.

A number of other equities analysts have also weighed in on the stock. Seaport Research Partners upped their target price on shares of Southwest Airlines from $46.00 to $52.00 and gave the stock a “buy” rating in a research report on Friday, January 9th. Barclays raised shares of Southwest Airlines from an “equal weight” rating to an “overweight” rating and upped their price target for the stock from $34.00 to $56.00 in a research report on Tuesday, December 16th. Weiss Ratings reiterated a “hold (c)” rating on shares of Southwest Airlines in a research note on Monday, December 29th. Wall Street Zen upgraded shares of Southwest Airlines from a “sell” rating to a “hold” rating in a report on Saturday, October 25th. Finally, Deutsche Bank Aktiengesellschaft lifted their price target on Southwest Airlines from $40.00 to $48.00 and gave the company a “buy” rating in a research report on Friday, December 12th. Seven investment 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. Based on data from MarketBeat.com, Southwest Airlines has a consensus rating of “Hold” and an average target price of $43.82.

Southwest Airlines Trading Up 18.5%

NYSE:LUV opened at $48.44 on Friday. Southwest Airlines has a 12 month low of $23.82 and a 12 month high of $49.12. The company has a current ratio of 0.49, a quick ratio of 0.42 and a debt-to-equity ratio of 0.52. The company has a 50-day moving average price of $40.42 and a 200-day moving average price of $35.14. The stock has a market cap of $25.05 billion, a price-to-earnings ratio of 57.66, a P/E/G ratio of 0.37 and a beta of 1.16.

Southwest Airlines (NYSE:LUV) last announced its quarterly earnings data 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. The business had revenue of $7.44 billion for the quarter, compared to analysts’ expectations of $7.51 billion. Southwest Airlines had a net margin of 1.57% and a return on equity of 6.11%. The business’s revenue was up 7.4% compared to the same quarter last year. During the same quarter in the prior year, the company earned $0.56 earnings per share. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. Equities analysts predict that Southwest Airlines will post 1.55 EPS for the current year.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of the stock. M&T Bank Corp lifted its position in shares of Southwest Airlines by 9.4% in the fourth quarter. M&T Bank Corp now owns 92,569 shares of the airline’s stock valued at $3,827,000 after acquiring an additional 7,927 shares in the last quarter. Ashton Thomas Private Wealth LLC lifted its stake in shares of Southwest Airlines by 3.0% during the fourth quarter. Ashton Thomas Private Wealth LLC now owns 19,513 shares of the airline’s stock valued at $810,000 after buying an additional 572 shares during the period. D.A. Davidson & CO. boosted its position in Southwest Airlines by 6.9% during the fourth quarter. D.A. Davidson & CO. now owns 9,511 shares of the airline’s stock worth $393,000 after acquiring an additional 610 shares during the last quarter. Inscription Capital LLC acquired a new position in Southwest Airlines in the fourth quarter valued at $218,000. Finally, Verdence Capital Advisors LLC grew its holdings in Southwest Airlines by 27.8% in the fourth quarter. Verdence Capital Advisors LLC now owns 35,988 shares of the airline’s stock valued at $1,487,000 after purchasing an additional 7,831 shares during the period. 80.82% of the stock is currently owned by institutional investors and hedge funds.

Key Stories Impacting Southwest Airlines

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

• Positive Sentiment: Company raised 2026 adjusted EPS guidance to at least $4.00 (more than 300% above 2025), signaling a large profit surge driven by new fees and pricing changes. PR News Release
• Positive Sentiment: Management ended open seating and introduced assigned seats plus new fees (e.g., seat selection, ancillary upsells). Analysts and investors view this as a structural revenue opportunity that prompted strong buying. CNBC: Forecasts profit surge
• Positive Sentiment: Q4 EPS beat consensus (reported $0.58 vs. ~$0.56 expected) and operating results showed profit improvement, supporting the credibility of management’s transformation. Yahoo Finance: Q4 Highlights
• Neutral Sentiment: Analysts remain mixed — some upgraded targets or reiterated conviction (JP Morgan Overweight; Evercore bumped target to $45 in‑line), but the median target is still below current levels, showing divergent views on valuation. Evercore ISI Price Target
• Neutral Sentiment: Investor commentary and transcripts highlight that the company’s transformation is underway (strong bookings, ancillary rollout); full realization depends on execution and demand durability. Earnings Call Transcript
• Negative Sentiment: Q4 revenue ($7.44B) missed consensus and some metrics (cash from operations, capex increase) show balance‑sheet pressure; revenue miss tempers the beat and raises execution risk. Zacks: Revenues Lag
• Negative Sentiment: Q1 2026 EPS guidance of ~$0.45 came in below the Street (~$0.57), creating a near‑term earnings gap that could produce volatility as investors re‑rate the timing of benefits. (Company press and market coverage document the Q1 guide.)
• Negative Sentiment: Unusual put‑option activity and commentary that shares may be “fully valued” suggest some traders are hedging or taking profits after the rapid run; that can amplify short‑term downside if sentiment shifts. Seeking Alpha: Valuation Caution

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.