Southwest Airlines (NYSE:LUV) Cut to Hold at Wall Street Zen

Wall Street Zen lowered shares of Southwest Airlines (NYSE:LUV) from a buy rating to a hold rating in a research report sent to investors on Saturday.

Several other research firms have also recently commented on LUV. Raymond James Financial boosted their price target on shares of Southwest Airlines from $42.00 to $49.00 and gave the stock an “outperform” rating in a report on Friday, December 19th. BMO Capital Markets raised shares of Southwest Airlines from a “market perform” rating to an “outperform” rating and lifted their price objective for the stock from $43.00 to $57.50 in a research report on Friday, January 30th. Seaport Research Partners boosted their target price on shares of Southwest Airlines from $57.00 to $58.00 in a research note on Thursday, January 29th. Susquehanna increased their target price on Southwest Airlines from $45.00 to $55.00 and gave the company a “neutral” rating in a report on Tuesday, February 3rd. Finally, BNP Paribas Exane raised their price target on Southwest Airlines from $19.00 to $24.00 and gave the company an “underperform” rating in a research note on Monday, December 8th. Eight 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’s stock. According to data from MarketBeat, Southwest Airlines presently has a consensus rating of “Hold” and an average price target of $46.29.

Southwest Airlines Price Performance

LUV stock opened at $40.18 on Friday. The business’s 50-day moving average is $46.63 and its two-hundred day moving average is $38.79. The company has a debt-to-equity ratio of 0.57, a current ratio of 0.52 and a quick ratio of 0.45. The firm has a market capitalization of $19.74 billion, a P/E ratio of 47.84, a P/E/G ratio of 0.28 and a beta of 1.10. Southwest Airlines has a 1 year low of $23.82 and a 1 year high of $55.11.

Southwest Airlines (NYSE:LUV) last announced its quarterly earnings data on Wednesday, January 28th. The airline reported $0.58 EPS for the quarter, topping analysts’ consensus estimates of $0.56 by $0.02. The business had revenue of $7.44 billion during the quarter, compared to the consensus estimate of $7.51 billion. Southwest Airlines had a return on equity of 6.18% and a net margin of 1.57%.The business’s revenue for the quarter was up 7.4% on a year-over-year basis. During the same period in the previous year, the company posted $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. Analysts anticipate that Southwest Airlines will post 1.55 earnings per share for the current fiscal year.

Southwest Airlines Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, April 2nd. Stockholders of record on Thursday, March 12th will be issued 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 of this dividend is Thursday, March 12th. Southwest Airlines’s payout ratio is presently 85.71%.

Institutional Trading of Southwest Airlines

A number of large investors have recently bought and sold shares of LUV. Corient Private Wealth LLC increased its stake in Southwest Airlines by 27.9% in the fourth quarter. Corient Private Wealth LLC now owns 85,759 shares of the airline’s stock valued at $3,545,000 after purchasing an additional 18,685 shares during the period. Hsbc Holdings PLC boosted its stake in shares of Southwest Airlines by 23.8% during the fourth quarter. Hsbc Holdings PLC now owns 939,398 shares of the airline’s stock worth $38,916,000 after buying an additional 180,619 shares during the period. SHP Wealth Management acquired a new stake in shares of Southwest Airlines during the fourth quarter worth about $25,000. Strategic Investment Solutions Inc. IL grew its holdings in shares of Southwest Airlines by 37.9% during the fourth quarter. Strategic Investment Solutions Inc. IL now owns 7,275 shares of the airline’s stock worth $301,000 after buying an additional 2,000 shares during the last quarter. Finally, MidFirst Bank purchased a new position in shares of Southwest Airlines during the fourth quarter worth about $39,000. Institutional investors and hedge funds own 80.82% of the company’s stock.

Key Headlines Impacting Southwest Airlines

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

• Positive Sentiment: UBS lowered its price target on LUV to $59 but kept a “buy” rating, noting upside from current levels; the note supports constructive sentiment despite the cut. Read More.
• Positive Sentiment: UBS says US airline stocks may be near a bottom even after recent declines and expects many carriers to hit the midpoint of Q1 guidance, which helps sector-wide sentiment. Read More.
• Positive Sentiment: A short-term sector rebound — airlines rallied after two rough weeks when jet fuel spiked — is lifting peers including LUV. Read More.
• Neutral Sentiment: Airline CEOs urged Congress to end a government shutdown to avoid travel disruptions over spring break — this is an industry-wide operational risk rather than a Southwest-specific issue. Read More.
• Negative Sentiment: UBS cut price targets and estimates across its U.S. airline coverage, citing “significant uncertainty” around fuel costs and 2026 outlook — a headwind for valuation and analyst sentiment. Read More.
• Negative Sentiment: Wells Fargo trimmed its LUV target from $50 to $44 and moved to an “equal weight” rating, reducing near-term upside expectations. Read More. Read More.
• Negative Sentiment: Southwest will stop flying to Chicago O’Hare and Washington Dulles starting June 4, a network change that could lower revenue from those markets and upset some customers. Read More.
• Negative Sentiment: Longtime flyers are publicly reacting negatively to changes in Southwest’s A-List benefits, signaling potential customer-satisfaction and loyalty risks. Read More.
• Negative Sentiment: Zacks Research has issued negative earnings estimates for LUV, adding downward pressure to near-term expectations. Read More.

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.