Southwest Airlines (NYSE:LUV) Issues FY 2026 Earnings Guidance

Southwest Airlines (NYSE:LUV) updated its FY 2026 earnings guidance on Wednesday. The company provided earnings per share (EPS) guidance of 4.000- for the period, compared to the consensus estimate of 2.310. The company issued revenue guidance of -. Southwest Airlines also updated its Q1 2026 guidance to 0.450- EPS.

Southwest Airlines Price Performance

LUV stock traded down $0.40 during trading on Wednesday, hitting $40.94. The company had a trading volume of 10,555,389 shares, compared to its average volume of 8,640,491. The business has a 50 day moving average of $39.89 and a 200 day moving average of $35.01. The firm has a market capitalization of $21.17 billion, a price-to-earnings ratio of 62.98, a P/E/G ratio of 0.38 and a beta of 1.16. The company has a current ratio of 0.49, a quick ratio of 0.42 and a debt-to-equity ratio of 0.52. Southwest Airlines has a fifty-two week low of $23.82 and a fifty-two week high of $45.02.

Southwest Airlines (NYSE:LUV) last released its earnings results on Wednesday, January 28th. The airline reported $0.58 EPS for the quarter, beating the consensus estimate of $0.55 by $0.03. The firm had revenue of $7.44 billion for the quarter, compared to analysts’ expectations of $7.51 billion. Southwest Airlines had a net margin of 1.38% and a return on equity of 6.39%. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. As a group, research analysts predict that Southwest Airlines will post 1.55 earnings per share for the current year.

Southwest Airlines Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, January 16th. Stockholders 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 annualized dividend and a dividend yield of 1.8%. Southwest Airlines’s dividend payout ratio (DPR) is 110.77%.

Analysts Set New Price Targets

Several brokerages have recently weighed in on LUV. Bank of America upped their price objective on Southwest Airlines from $28.00 to $37.00 and gave the company an “underperform” rating in a report on Tuesday, January 6th. Citigroup upped their price target on shares of Southwest Airlines from $38.00 to $44.00 and gave the company a “neutral” rating in a report on Wednesday, January 7th. Deutsche Bank Aktiengesellschaft lifted their price objective on shares of Southwest Airlines from $40.00 to $48.00 and gave the stock a “buy” rating in a research note on Friday, December 12th. Sanford C. Bernstein increased their target price on shares of Southwest Airlines from $31.00 to $34.00 and gave the company a “market perform” rating in a research note on Thursday, November 20th. Finally, Wall Street Zen upgraded shares of Southwest Airlines from a “sell” rating to a “hold” rating in a report on Saturday, October 25th. Six analysts have rated the stock with a Buy rating, eleven have given a Hold rating and four have issued a Sell rating to the company’s stock. According to MarketBeat, the stock currently has an average rating of “Hold” and a consensus target price of $42.37.

Southwest Airlines News Summary

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

• Positive Sentiment: Q4 EPS beat and improved profitability — Southwest reported Q4 EPS of $0.58, topping estimates and showing profit improvement versus prior year, supporting near-term earnings credibility. Article Title
• Positive Sentiment: Very strong FY2026 guidance — management guided to adjusted EPS of at least $4.00 for 2026 (vs. $0.93 adjusted in 2025), citing revenue initiatives and the business transformation; this materially raises forward-profit expectations. Article Title
• Positive Sentiment: Revenue initiatives — the shift from open seating to assigned seats plus new bag fees are being promoted as durable revenue levers that underpin the guidance and reframe Southwest’s unit economics. Article Title
• Neutral Sentiment: Revenue miss and mixed quarter — total revenue rose year-over-year to $7.44B but slightly missed consensus (~$7.51–7.59B), so top-line momentum is less clear even as margins improved. Article Title
• Neutral Sentiment: Analyst positioning — some firms are raising targets (Jefferies to $45) and others remain mixed, so Street views vary and price-target dispersion could sustain volatility. Article Title
• Negative Sentiment: Cash-flow and liquidity pressure — operating cash fell sharply and cash & equivalents declined materially YoY while capex rose, which could constrain flexibility if recovery stalls. Article Title
• Negative Sentiment: Elevated put-option activity — an unusual spike in put buying signals that some traders are hedging or betting on downside, which can increase intraday volatility. (No link available)

Institutional Investors Weigh In On Southwest Airlines

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. MUFG Securities EMEA plc bought a new position in Southwest Airlines during the second quarter valued at about $55,000. Ossiam acquired a new position in shares of Southwest Airlines during the 2nd quarter valued at about $61,000. Brown Brothers Harriman & Co. raised its stake in shares of Southwest Airlines by 159.0% in the 3rd quarter. Brown Brothers Harriman & Co. now owns 2,370 shares of the airline’s stock valued at $76,000 after acquiring an additional 1,455 shares in the last quarter. Federated Hermes Inc. acquired a new stake in Southwest Airlines in the 2nd quarter worth approximately $80,000. Finally, Danske Bank A S bought a new stake in Southwest Airlines during the third quarter worth approximately $108,000. Hedge funds and other institutional investors own 80.82% of the company’s stock.

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.