TD Cowen Upgrades Southwest Airlines (NYSE:LUV) to Buy

Southwest Airlines (NYSE:LUV) was upgraded by equities research analysts at TD Cowen from a “hold” rating to a “buy” rating in a research note issued to investors on Friday, MarketBeat Ratings reports. The firm presently has a $66.00 target price on the airline’s stock, up from their previous target price of $50.00. TD Cowen’s price objective indicates a potential upside of 34.16% from the stock’s current price.

A number of other research analysts have also recently commented on LUV. Evercore upped their price objective on Southwest Airlines from $40.00 to $45.00 and gave the company an “in-line” rating in a report on Thursday, January 29th. BMO Capital Markets raised Southwest Airlines from a “market perform” rating to an “outperform” rating and lifted their target price for the company from $43.00 to $57.50 in a research report on Friday, January 30th. Deutsche Bank Aktiengesellschaft increased their target price on shares of Southwest Airlines from $40.00 to $48.00 and gave the stock a “buy” rating in a report on Friday, December 12th. Susquehanna upped their price objective on Southwest Airlines from $45.00 to $55.00 and gave the stock a “neutral” rating in a research report on Tuesday, February 3rd. Finally, Raymond James Financial lifted their price target on shares of Southwest Airlines from $42.00 to $49.00 and gave the stock an “outperform” rating in a research note on Friday, December 19th. One analyst has rated the stock with a Strong Buy rating, eight have given a Buy rating, eight have given a Hold rating and three have issued a Sell rating to the stock. According to MarketBeat, the company has an average rating of “Hold” and an average price target of $49.03.

Southwest Airlines Stock Performance

Shares of LUV stock opened at $49.20 on Friday. The company has a market capitalization of $24.17 billion, a P/E ratio of 58.57, a P/E/G ratio of 0.35 and a beta of 1.15. Southwest Airlines has a 12-month low of $23.82 and a 12-month high of $55.11. The business’s 50 day moving average is $46.30 and its two-hundred day moving average is $37.88. The company has a current ratio of 0.52, a quick ratio of 0.45 and a debt-to-equity ratio of 0.57.

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

Institutional Investors Weigh In On Southwest Airlines

Several institutional investors and hedge funds have recently made changes to their positions in LUV. Cibc World Market Inc. increased its stake in shares of Southwest Airlines by 12.6% during the 3rd quarter. Cibc World Market Inc. now owns 1,916,003 shares of the airline’s stock worth $61,140,000 after purchasing an additional 214,092 shares during the last quarter. RWA Wealth Partners LLC acquired a new stake in Southwest Airlines in the 2nd quarter worth $1,652,000. Hussman Strategic Advisors Inc. acquired a new position in Southwest Airlines in the 3rd quarter valued at approximately $2,010,000. Gradient Investments LLC lifted its position in Southwest Airlines by 5.4% in the third quarter. Gradient Investments LLC now owns 578,088 shares of the airline’s stock worth $18,447,000 after purchasing an additional 29,665 shares during the period. Finally, Fox Run Management L.L.C. acquired a new position in Southwest Airlines in the second quarter worth about $271,000. 80.82% of the stock is currently owned by hedge funds and other institutional investors.

Key Headlines Impacting Southwest Airlines

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

• Positive Sentiment: Management’s overhaul and 2026 guidance are supporting investor confidence — coverage notes the transformation and clearer FY‑2026 targets that helped lift sentiment. A Look At Southwest Airlines (LUV) Valuation As Its Overhaul And 2026 Guidance Boost Investor Confidence
• Positive Sentiment: Product changes (assigned seating, extra‑legroom options, expanded distribution, free Wi‑Fi for Rapid Rewards) plus a large 2025 shareholder return (~$2.9B) are reframing Southwest from a low‑cost carrier to a differentiated, revenue‑enhancing operator. Is Southwest’s Bold Shift To Assigned Seating And Perks Altering The Investment Case For LUV?
• Positive Sentiment: TD Cowen upgraded LUV from Hold to Buy with a $66 price target, signaling analyst optimism and adding potential upside from improved sentiment and coverage. Benzinga note on TD Cowen upgrade
• Positive Sentiment: Short interest dropped meaningfully in February (≈22.6% decline), reducing immediate short‑pressure and indicating some bearish positions have been covered. (Market data summarized publicly.)
• Neutral Sentiment: Recent earnings showed a modest EPS beat but a revenue miss; market reaction since the report has been positive overall (LUV up ~5% since earnings), but investors are now parsing forward guidance and execution risks. Why Is Southwest (LUV) Up 5% Since Last Earnings Report?
• Neutral Sentiment: Analysts and commentators are debating valuation — some see LUV as still attractive given execution and margin upside, while others flag stretched momentum after the recent run. Are Investors Undervaluing Southwest Airlines (LUV) Right Now?
• Negative Sentiment: Sector headwinds: rising crude oil and broader airline weakness (notably United and Delta share drops) are pressuring airline multiples and can offset Southwest’s company‑level gains. United Airlines, Delta Stocks Fall. Why Airlines Are Getting Crushed.
• Negative Sentiment: Investor caution remains because higher industry labor costs and legacy carriers’ balance‑sheet issues keep the sector sensitive to macro shocks, which can trigger short‑term pullbacks even for stronger operators. AAL Benefits From Improved Air-Travel Demand Amid High Costs

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.