Southwest Airlines (NYSE:LUV) Reaches New 52-Week High Following Strong Earnings

Southwest Airlines Co. (NYSE:LUV) reached a new 52-week high during trading on Thursday after the company announced better than expected quarterly earnings. The stock traded as high as $46.14 and last traded at $45.7610, with a volume of 8915267 shares changing hands. The stock had previously closed at $40.86.

The airline reported $0.58 EPS for the quarter, topping analysts’ consensus estimates of $0.56 by $0.02. The firm had revenue of $7.44 billion during the quarter, compared to the consensus estimate of $7.51 billion. Southwest Airlines had a net margin of 1.38% and a return on equity of 6.39%. The company’s revenue was up 7.4% compared to the same quarter last year. 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.

Southwest Airlines Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Friday, January 16th. Shareholders of record on Friday, December 26th were issued a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a yield of 1.6%. The ex-dividend date of this dividend was Friday, December 26th. Southwest Airlines’s dividend payout ratio (DPR) is currently 110.77%.

Key Southwest Airlines News

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

• Positive Sentiment: Management set 2026 adjusted EPS guidance of at least $4.00 — well above Street expectations — citing revenue initiatives and cost control as drivers; this is the primary catalyst lifting the stock. SOUTHWEST AIRLINES REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS; EXPECTS STRONG 2026 FINANCIAL PERFORMANCE FROM BUSINESS TRANSFORMATION
• Positive Sentiment: Company-wide changes — ending open seating, introducing assigned seats and baggage fees — are already contributing to revenue uplift in management’s commentary and analyst writeups, supporting the higher 2026 profit outlook. Southwest Airlines forecasts surge in 2026 profits after new seat, bag fees take hold
• Positive Sentiment: Q4 results: EPS marginally beat estimates and revenue grew ~7.4% y/y — evidence that revenue initiatives and cost control improved margins versus last year. These beat-and-guide dynamics helped lift sentiment. Southwest Airlines (LUV) Surpasses Q4 Earnings Estimates
• Positive Sentiment: Analyst moves: a few firms raised or refreshed targets/ratings after the results and guidance (e.g., Jefferies and Evercore/coverage notes), which provides incremental validation for the turnaround thesis. Analyst coverage and price-target commentary
• Neutral Sentiment: Equity research/strategy pieces (e.g., Zacks) highlight LUV as a value/growth combination given the pivot to higher-margin products; useful framing but not new company-level data. Here’s Why Southwest Airlines (LUV) is a Strong Value Stock
• Negative Sentiment: Near-term caution: Q1 2026 EPS guidance of roughly $0.45 is below consensus (~$0.57), signaling some front-loaded investments or seasonality that could pressure short-term results. SOUTHWEST AIRLINES REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS; EXPECTS STRONG 2026 FINANCIAL PERFORMANCE FROM BUSINESS TRANSFORMATION
• Negative Sentiment: Options activity: an unusual spike in put buying suggests some investors are hedging or betting on near-term downside, which can add volatility even as fundamentals improve.

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on LUV. Wells Fargo & Company assumed coverage on shares of Southwest Airlines in a report on Thursday, December 18th. They set an “equal weight” rating and a $45.00 target price for the company. Bank of America increased their target price on Southwest Airlines from $28.00 to $37.00 and gave the company an “underperform” rating in a research note on Tuesday, January 6th. Barclays upgraded shares of Southwest Airlines from an “equal weight” rating to an “overweight” rating and lifted their target price for the company from $34.00 to $56.00 in a research report on Tuesday, December 16th. Evercore ISI raised their price target on Southwest Airlines from $40.00 to $45.00 and gave the company an “in-line” rating in a report on Thursday. Finally, Citigroup boosted their target price on Southwest Airlines from $38.00 to $44.00 and gave the stock a “neutral” rating in a research report on Wednesday, January 7th. Six analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and four have given a Sell rating to the company. According to MarketBeat.com, Southwest Airlines presently has a consensus rating of “Hold” and an average price target of $42.63.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in the stock. AQR Capital Management LLC boosted its position in shares of Southwest Airlines by 100.6% in the 1st quarter. AQR Capital Management LLC now owns 39,347 shares of the airline’s stock worth $1,303,000 after purchasing an additional 19,729 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its stake in shares of Southwest Airlines by 5.4% during the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 61,060 shares of the airline’s stock valued at $2,050,000 after acquiring an additional 3,141 shares during the period. Empowered Funds LLC lifted its position in shares of Southwest Airlines by 7.6% in the first quarter. Empowered Funds LLC now owns 7,459 shares of the airline’s stock valued at $250,000 after acquiring an additional 527 shares in the last quarter. Farther Finance Advisors LLC boosted its holdings in shares of Southwest Airlines by 54.9% during the 2nd quarter. Farther Finance Advisors LLC now owns 5,996 shares of the airline’s stock valued at $195,000 after purchasing an additional 2,125 shares during the last quarter. Finally, Janney Montgomery Scott LLC raised its stake in Southwest Airlines by 11.0% during the second quarter. Janney Montgomery Scott LLC now owns 11,498 shares of the airline’s stock valued at $373,000 after purchasing an additional 1,136 shares in the last quarter. 80.82% of the stock is currently owned by institutional investors.

Southwest Airlines Price Performance

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 firm has a 50 day moving average price of $40.07 and a 200-day moving average price of $35.05. The firm has a market capitalization of $23.78 billion, a P/E ratio of 70.40, a price-to-earnings-growth ratio of 0.37 and a beta of 1.16.

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.