Traders Buy High Volume of Southwest Airlines Put Options (NYSE:LUV)

Southwest Airlines Co. (NYSE:LUV) saw some unusual options trading on Wednesday. Stock traders purchased 40,382 put options on the company. This represents an increase of 65% compared to the typical daily volume of 24,488 put options.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in LUV. Elevation Point Wealth Partners LLC purchased a new stake in shares of Southwest Airlines during the 2nd quarter valued at about $25,000. GHP Investment Advisors Inc. bought a new position in shares of Southwest Airlines during the 4th quarter valued at $26,000. Corsicana & Co. bought a new position in shares of Southwest Airlines during the 3rd quarter valued at $27,000. Quent Capital LLC purchased a new position in shares of Southwest Airlines in the 3rd quarter worth $27,000. Finally, Optima Capital LLC purchased a new position in shares of Southwest Airlines in the 4th quarter worth $27,000. 80.82% of the stock is currently owned by institutional investors.

Analyst Upgrades and Downgrades

A number of equities analysts have commented on LUV shares. TD Cowen boosted their price target on shares of Southwest Airlines from $31.00 to $42.00 and gave the stock a “hold” rating in a research note on Friday, December 12th. 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 report on Tuesday, January 13th. Raymond James Financial lifted their price target on Southwest Airlines from $42.00 to $49.00 and gave the stock an “outperform” rating in a research note on Friday, December 19th. Seaport Research Partners increased their price objective on Southwest Airlines from $46.00 to $52.00 and gave the company a “buy” rating in a research report on Friday, January 9th. Finally, Jefferies Financial Group upped their target price on Southwest Airlines from $42.00 to $45.00 and gave the stock a “hold” rating in a research note on Monday. 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. According to MarketBeat.com, the stock has a consensus rating of “Hold” and an average price target of $42.37.

Southwest Airlines Trading Down 1.0%

Shares of NYSE LUV traded down $0.40 during mid-day trading on Wednesday, hitting $40.94. The stock 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 price of $39.89 and a two-hundred day moving average price of $35.01. Southwest Airlines has a 1 year low of $23.82 and a 1 year high of $45.02. The company has a debt-to-equity ratio of 0.52, a quick ratio of 0.42 and a current ratio of 0.49. The firm has a market cap of $21.17 billion, a P/E ratio of 62.98, a price-to-earnings-growth ratio of 0.38 and a beta of 1.16.

Southwest Airlines (NYSE:LUV) last announced its quarterly earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.55 by $0.03. The business had revenue of $7.44 billion for the quarter, compared to analyst estimates 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. On average, equities analysts anticipate that Southwest Airlines will post 1.55 EPS for the current fiscal year.

Southwest Airlines Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Friday, January 16th. Stockholders of record on Friday, December 26th were given a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a dividend yield of 1.8%. The ex-dividend date was Friday, December 26th. Southwest Airlines’s dividend payout ratio (DPR) is currently 110.77%.

Trending Headlines about Southwest Airlines

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)

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.