Southwest Airlines (NYSE:LUV) Updates Q1 2026 Earnings Guidance

Southwest Airlines (NYSE:LUV) issued an update on its first quarter 2026 earnings guidance on Wednesday morning. The company provided EPS guidance of 0.450- for the period, compared to the consensus EPS estimate of 0.570. The company issued revenue guidance of -. Southwest Airlines also updated its FY 2026 guidance to 4.000- EPS.

Wall Street Analysts Forecast Growth

Several analysts recently issued reports on the stock. Wells Fargo & Company started coverage on shares of Southwest Airlines in a report on Thursday, December 18th. They issued an “equal weight” rating and a $45.00 price target on the stock. Raymond James Financial boosted their price objective on Southwest Airlines from $42.00 to $49.00 and gave the company an “outperform” rating in a report on Friday, December 19th. BNP Paribas Exane increased their target price on Southwest Airlines from $19.00 to $24.00 and gave the stock an “underperform” rating in a report on Monday, December 8th. Deutsche Bank Aktiengesellschaft lifted their target price on Southwest Airlines from $40.00 to $48.00 and gave the stock a “buy” rating in a research report on Friday, December 12th. Finally, Bank of America upped their price target on Southwest Airlines from $28.00 to $37.00 and gave the company an “underperform” rating in a research report on Tuesday, January 6th. Six analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and four have assigned a Sell rating to the company’s stock. According to data from MarketBeat, the company presently has an average rating of “Hold” and an average target price of $42.37.

Southwest Airlines Stock Performance

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 company has a current ratio of 0.49, a quick ratio of 0.42 and a debt-to-equity ratio of 0.52. The company has a 50 day simple moving average of $39.89 and a 200-day simple moving average of $35.01. The stock 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. Southwest Airlines has a 52 week low of $23.82 and a 52 week high of $45.02.

Southwest Airlines (NYSE:LUV) last announced its quarterly 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 company 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, research analysts expect that Southwest Airlines will post 1.55 earnings per share for the current fiscal year.

Southwest Airlines Dividend Announcement

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

More Southwest Airlines News

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)

Hedge Funds Weigh In On Southwest Airlines

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. Triumph Capital Management purchased a new stake in Southwest Airlines during the third quarter valued at about $169,000. BOKF NA grew its position in Southwest Airlines by 16.5% during the 3rd quarter. BOKF NA now owns 7,762 shares of the airline’s stock worth $248,000 after purchasing an additional 1,101 shares in the last quarter. Diversify Advisory Services LLC raised its stake in Southwest Airlines by 10.6% during the 3rd quarter. Diversify Advisory Services LLC now owns 7,523 shares of the airline’s stock valued at $229,000 after purchasing an additional 721 shares during the period. NewEdge Advisors LLC lifted its holdings in shares of Southwest Airlines by 22.4% in the second quarter. NewEdge Advisors LLC now owns 5,118 shares of the airline’s stock valued at $166,000 after purchasing an additional 935 shares in the last quarter. Finally, EverSource Wealth Advisors LLC boosted its position in shares of Southwest Airlines by 73.4% in the second quarter. EverSource Wealth Advisors LLC now owns 5,690 shares of the airline’s stock worth $185,000 after buying an additional 2,408 shares during the period. Institutional investors and hedge funds own 80.82% of the company’s stock.

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.