Zacks Research Issues Pessimistic Outlook for LUV Earnings

Southwest Airlines Co. (NYSE:LUV) – Equities researchers at Zacks Research decreased their Q1 2026 earnings per share (EPS) estimates for shares of Southwest Airlines in a report released on Thursday, March 12th. Zacks Research analyst Team now expects that the airline will earn $0.40 per share for the quarter, down from their prior estimate of $0.45. Zacks Research has a “Hold” rating on the stock. The consensus estimate for Southwest Airlines’ current full-year earnings is $1.55 per share. Zacks Research also issued estimates for Southwest Airlines’ Q2 2026 earnings at $1.29 EPS, Q3 2026 earnings at $0.85 EPS, Q4 2026 earnings at $1.36 EPS, FY2026 earnings at $3.90 EPS, Q1 2027 earnings at $0.49 EPS, Q2 2027 earnings at $1.36 EPS, Q3 2027 earnings at $0.91 EPS, Q4 2027 earnings at $1.95 EPS and FY2027 earnings at $4.71 EPS.

Southwest Airlines (NYSE:LUV) last announced its quarterly earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share for the quarter, beating analysts’ consensus estimates of $0.56 by $0.02. The firm had revenue of $7.44 billion for the quarter, compared to analyst estimates of $7.51 billion. Southwest Airlines had a net margin of 1.57% and a return on equity of 6.18%. The business’s revenue was up 7.4% on a year-over-year basis. During the same quarter in the previous year, the firm 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.

A number of other equities analysts have also weighed in on LUV. Wells Fargo & Company reduced their target price on shares of Southwest Airlines from $50.00 to $44.00 and set an “equal weight” rating for the company in a research note on Monday. Morgan Stanley lifted their price target on Southwest Airlines from $50.00 to $55.00 and gave the company an “overweight” rating in a research note on Friday, January 30th. Sanford C. Bernstein boosted their price target on Southwest Airlines from $31.00 to $34.00 and gave the company a “market perform” rating in a report on Thursday, November 20th. Citigroup increased their price objective on Southwest Airlines from $44.00 to $54.00 in a report on Tuesday, February 3rd. Finally, The Goldman Sachs Group lifted their target price on Southwest Airlines from $29.00 to $32.00 and gave the company a “sell” rating in a research report on Friday, January 30th. Eight equities research analysts have rated the stock with a Buy rating, nine have issued a Hold rating and four have given a Sell rating to the company. Based on data from MarketBeat, the company currently has an average rating of “Hold” and an average price target of $46.29.

Southwest Airlines Trading Up 2.1%

Shares of NYSE:LUV opened at $41.09 on Monday. Southwest Airlines has a 12 month low of $23.82 and a 12 month high of $55.11. The company has a quick ratio of 0.45, a current ratio of 0.52 and a debt-to-equity ratio of 0.57. The company’s fifty day simple moving average is $46.60 and its 200 day simple moving average is $38.84. The firm has a market cap of $20.19 billion, a price-to-earnings ratio of 48.92, a PEG ratio of 0.29 and a beta of 1.10.

Southwest Airlines Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, April 2nd. Shareholders of record on Thursday, March 12th will be paid 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 dividend payout ratio (DPR) is 85.71%.

Institutional Investors Weigh In On Southwest Airlines

Several hedge funds and other institutional investors have recently made changes to their positions in the business. Arrowstreet Capital Limited Partnership boosted its stake in Southwest Airlines by 2,403.8% during the 2nd quarter. Arrowstreet Capital Limited Partnership now owns 10,120,368 shares of the airline’s stock valued at $328,305,000 after purchasing an additional 9,716,160 shares during the last quarter. Norges Bank purchased a new stake in shares of Southwest Airlines in the fourth quarter worth approximately $172,038,000. Ameriprise Financial Inc. raised its stake in shares of Southwest Airlines by 43.7% in the third quarter. Ameriprise Financial Inc. now owns 12,335,167 shares of the airline’s stock worth $393,615,000 after purchasing an additional 3,753,183 shares during the last quarter. SG Americas Securities LLC lifted its holdings in shares of Southwest Airlines by 2,468.4% in the fourth quarter. SG Americas Securities LLC now owns 3,752,352 shares of the airline’s stock valued at $155,085,000 after purchasing an additional 3,606,255 shares in the last quarter. Finally, Massachusetts Financial Services Co. MA bought a new position in shares of Southwest Airlines in the fourth quarter valued at approximately $143,450,000. 80.82% of the stock is owned by institutional investors.

More Southwest Airlines News

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

• Positive Sentiment: Broader sector strength: Delta and American raised revenue guidance and airlines rallied as demand appears to outweigh the fuel spike — a positive spillover for Southwest given industry-wide pricing power and capacity recovery. Read More.
• Positive Sentiment: UBS retains a “buy” rating on LUV with a $59 price target (lowered), signaling analyst conviction that the shares have significant upside despite fuel pressure. Read More.
• Neutral Sentiment: Management commentary available — Southwest presented at the JPMorgan Industrials Conference; transcript may provide detail on network, costs and fuel hedging that investors will parse for near-term guidance credibility. Read More.
• Neutral Sentiment: UBS and other firms cut estimates and price targets across U.S. airlines citing “significant uncertainty” around jet fuel — this is a sector headwind but also frames a potential valuation bottom for long-term investors. Read More.
• Neutral Sentiment: Industry lobbying and operational risks: airline CEOs urged Congress to resolve a shutdown risk that could disrupt travel demand during a peak period; outcome affects near-term traffic. Read More.
• Negative Sentiment: Wells Fargo cut its price target on LUV to $44 and moved to “equal weight,” signaling reduced upside from that shop and adding selling pressure from some institutional investors. Read More.
• Negative Sentiment: Network change: Southwest will stop serving Chicago O’Hare and Washington Dulles starting June 4 — could lower revenue from those markets and raises questions about capacity redeployment and unit revenue impact. Read More.
• Negative Sentiment: Customer backlash: longtime flyers are publicly criticizing changes to A-List benefits, a reputational issue that can affect loyalty and ancillary revenue trends if not addressed. Read More.
• Negative Sentiment: Analyst downgrades/estimates: Zacks issued a negative earnings estimate for LUV, adding to the chorus of downward revisions that could pressure near-term sentiment. Read More.

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.