Q3 EPS Estimate for Southwest Airlines Lifted by Analyst

Southwest Airlines Co. (NYSE:LUV) – Analysts at Zacks Research boosted their Q3 2026 earnings per share (EPS) estimates for Southwest Airlines in a note issued to investors on Wednesday, October 7th. Zacks Research analyst Team now expects that the airline will post earnings per share of $0.74 for the quarter, up from their prior forecast of $0.73. Zacks Research currently has a “Strong Sell” rating on the stock. The consensus estimate for Southwest Airlines’ current full-year earnings is $3.16 per share. Zacks Research also issued estimates for Southwest Airlines’ Q4 2026 earnings at $1.18 EPS, FY2026 earnings at $3.31 EPS, Q3 2027 earnings at $1.06 EPS, Q4 2027 earnings at $1.99 EPS, FY2027 earnings at $5.02 EPS, Q3 2028 earnings at $1.07 EPS and FY2028 earnings at $5.90 EPS.

Southwest Airlines (NYSE:LUV) last released its quarterly earnings results on Wednesday, July 22nd. The airline reported $0.94 earnings per share for the quarter, beating the consensus estimate of $0.52 by $0.42. Southwest Airlines had a return on equity of 14.15% and a net margin of 2.78%.The business had revenue of $8.72 billion during the quarter, compared to analysts’ expectations of $8.58 billion. During the same quarter last year, the business posted $0.43 EPS. The firm’s revenue for the quarter was up 16.4% compared to the same quarter last year. Southwest Airlines has set its FY 2026 guidance at 3.250-4.250 EPS and its Q3 2026 guidance at 0.500-0.750 EPS.

A number of other equities research analysts also recently issued reports on LUV. Bank of America upped their price target on shares of Southwest Airlines from $40.00 to $45.00 and gave the company an “underperform” rating in a research note on Wednesday, July 1st. Jefferies Financial Group increased their price target on shares of Southwest Airlines from $44.00 to $50.00 and gave the company a “hold” rating in a report on Wednesday, July 1st. Rothschild & Co Redburn raised Southwest Airlines from a “sell” rating to a “neutral” rating and boosted their price objective for the stock from $35.00 to $40.00 in a research note on Friday, September 18th. TD Cowen dropped their target price on Southwest Airlines from $48.00 to $47.00 and set a “buy” rating for the company in a report on Friday, October 2nd. Finally, Raymond James Financial dropped their price objective on shares of Southwest Airlines from $60.00 to $54.00 and set an “outperform” rating for the company in a research note on Monday, August 24th. Nine research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and four have assigned a Sell rating to the company. Based on data from MarketBeat, Southwest Airlines currently has a consensus rating of “Hold” and an average target price of $47.45.

Southwest Airlines Stock Down 1.6%

NYSE LUV opened at $41.77 on Thursday. The stock has a 50 day moving average price of $41.92 and a 200-day moving average price of $42.75. Southwest Airlines has a one year low of $29.26 and a one year high of $55.11. The company has a debt-to-equity ratio of 0.54, a quick ratio of 0.42 and a current ratio of 0.49. The company has a market capitalization of $20.43 billion, a P/E ratio of 25.62, a P/E/G ratio of 0.41 and a beta of 1.16.

Institutional Investors Weigh In On Southwest Airlines

Institutional investors and hedge funds have recently bought and sold shares of the company. Primecap Management Co. CA purchased a new position in shares of Southwest Airlines during the second quarter valued at $2,509,179,000. BlackRock Inc. purchased a new stake in shares of Southwest Airlines in the 2nd quarter worth approximately $1,538,382,000. Dimensional Fund Advisors LP boosted its stake in shares of Southwest Airlines by 2.1% during the first quarter. Dimensional Fund Advisors LP now owns 5,763,154 shares of the airline’s stock valued at $216,472,000 after purchasing an additional 117,833 shares in the last quarter. Bank of New York Mellon Corp purchased a new position in Southwest Airlines during the second quarter valued at approximately $234,872,000. Finally, Capitolis Liquid Global Markets LLC raised its stake in Southwest Airlines by 51.4% in the fourth quarter. Capitolis Liquid Global Markets LLC now owns 3,443,500 shares of the airline’s stock worth $142,320,000 after buying an additional 1,169,150 shares in the last quarter. 80.82% of the stock is owned by institutional investors.

Southwest Airlines Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Thursday, September 24th. Investors of record on Thursday, September 3rd were issued a $0.18 dividend. The ex-dividend date was Thursday, September 3rd. This represents a $0.72 dividend on an annualized basis and a dividend yield of 1.7%. Southwest Airlines’s payout ratio is presently 44.17%.

Key Southwest Airlines News

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

• Positive Sentiment: Southwest launched a first-of-its-kind U.S. airline plugin in ChatGPT, allowing customers to discover destinations, plan trips and shop for flights through an AI-powered experience developed with OpenAI and Amazon Web Services. The initiative could help Southwest reach travelers earlier in the booking process and improve customer engagement. Southwest Airlines launches ChatGPT airline plugin
• Neutral Sentiment: Susquehanna lowered its Southwest price target from $50 to $45 while maintaining a neutral rating. The revised target still implies potential upside from the current trading level, but the reduction signals more limited expectations. Susquehanna sets new Southwest price target
• Neutral Sentiment: Analyst views remain divided: Citi assigned a hold rating, while Bank of America reaffirmed its sell rating, highlighting uncertainty about Southwest’s earnings outlook and valuation.
• Negative Sentiment: Zacks Research downgraded LUV from “Hold” to “Strong Sell” and named Southwest its Bear of the Day. The downgrade adds fresh negative sentiment and may encourage additional selling. Zacks names Southwest Bear of the Day
• Negative Sentiment: Airline shares are being targeted by short sellers amid higher fuel costs and concerns that geopolitical tensions could keep oil prices elevated, creating a risk to Southwest’s profitability. Airline stocks face short-selling pressure

About Southwest Airlines

Southwest Airlines Co is a U.S. commercial airline headquartered in Dallas, Texas, and listed on the New York Stock Exchange under the symbol LUV. The company was founded in 1967 and began operating scheduled passenger service in 1971, initially serving cities in Texas before expanding across the United States.

Southwest primarily provides scheduled air transportation for passengers and also offers air cargo services. Its operations are centered on a large Boeing 737 fleet, supporting frequent service between major cities and regional airports.