Investors Buy Large Volume of Call Options on Southwest Airlines (NYSE:LUV)

Southwest Airlines Co. (NYSE:LUV) was the target of some unusual options trading activity on Monday. Investors bought 52,057 call options on the company. This is an increase of 94% compared to the typical daily volume of 26,898 call options.

Trending Headlines about Southwest Airlines

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

• Positive Sentiment: Large bullish options flow: traders bought ~52,057 call options on Monday (?+94% vs. average), indicating aggressive short-term bullish positioning that can amplify upward price moves as market makers hedge.
• Positive Sentiment: Zacks is highlighting LUV across multiple lists (momentum, strong-buy, value, income), boosting retail/institutional interest and buy-side flow. Best Momentum Stocks to Buy for February 2nd Why Southwest Airlines (LUV) is a Top Momentum Stock for the Long-Term New Strong Buy Stocks for February 2nd
• Positive Sentiment: BMO Capital Markets upgraded LUV, which often triggers short-term buying from funds that follow broker/consensus ratings. Southwest Airlines (NYSE:LUV) Upgraded at BMO Capital Markets
• Positive Sentiment: Multiple price-target raises published overnight—several outlets raised LUV targets (examples include $32, $42, $55, $58)—creating headline momentum and validating the upgrade narrative. Price Target Raised to $32.00 Price Target Raised to $55.00 Price Target Raised to $42.00 Price Target Raised to $58.00
• Positive Sentiment: Analyst/commentary pieces pointing to a turnaround: Barchart notes LUV’s best day since 1978 and frames 2026 as a recovery year, and TipRanks highlights the company’s Q4 call signaling a profit shift for 2026—both reinforce the earnings/guidance story that supports higher valuations. This 1 Overlooked Airline Stock to Be the Best Bet on a Turnaround in 2026 Earnings Call Signals 2026 Profit Shift
• Neutral Sentiment: Operational/strategy coverage (seat overhaul) explores potential upside to unit revenue and customer loyalty but is longer-term and execution-dependent—worth watching but not an immediate catalyst. Seat Overhaul Tests Earnings Power

Analysts Set New Price Targets

A number of equities analysts recently issued reports on the company. Sanford C. Bernstein raised their price target on Southwest Airlines from $31.00 to $34.00 and gave the stock a “market perform” rating in a report on Thursday, November 20th. Bank of America upped their target price on shares of Southwest Airlines from $37.00 to $42.00 and gave the stock an “underperform” rating in a research report on Friday. 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. TD Cowen increased their price target on shares of Southwest Airlines from $42.00 to $50.00 and gave the company a “hold” rating in a research report on Friday. Finally, Barclays raised Southwest Airlines from an “equal weight” rating to an “overweight” rating and raised their price target for the stock from $34.00 to $56.00 in a research report on Tuesday, December 16th. Seven analysts have rated the stock with a Buy rating, ten have assigned a Hold rating and four have given a Sell rating to the company. According to MarketBeat.com, the company has an average rating of “Hold” and a consensus target price of $44.76.

Hedge Funds Weigh In On Southwest Airlines

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. RWA Wealth Partners LLC bought a new position in Southwest Airlines in the second quarter worth about $1,652,000. Hussman Strategic Advisors Inc. acquired a new position in Southwest Airlines during the 3rd quarter worth $2,010,000. Howard Capital Management Inc. lifted its holdings in Southwest Airlines by 8.3% in the second quarter. Howard Capital Management Inc. now owns 127,218 shares of the airline’s stock worth $4,150,000 after purchasing an additional 9,739 shares during the period. Gradient Investments LLC boosted its holdings in shares of Southwest Airlines by 5.4% in the third quarter. Gradient Investments LLC now owns 578,088 shares of the airline’s stock valued at $18,447,000 after acquiring an additional 29,665 shares in the last quarter. Finally, Rhumbline Advisers boosted its stake in Southwest Airlines by 30.1% during the 2nd quarter. Rhumbline Advisers now owns 1,406,652 shares of the airline’s stock valued at $45,632,000 after purchasing an additional 325,030 shares in the last quarter. Hedge funds and other institutional investors own 80.82% of the company’s stock.

Southwest Airlines Trading Up 4.4%

Shares of NYSE LUV traded up $2.11 during midday trading on Monday, hitting $49.63. The stock had a trading volume of 9,100,547 shares, compared to its average volume of 10,120,991. Southwest Airlines has a 1-year low of $23.82 and a 1-year high of $49.85. The company has a fifty day moving average price of $40.71 and a 200 day moving average price of $35.18. 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 has a market capitalization of $25.66 billion, a price-to-earnings ratio of 59.08, a PEG ratio of 0.37 and a beta of 1.15.

Southwest Airlines (NYSE:LUV) last released its quarterly earnings data on Wednesday, January 28th. The airline reported $0.58 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.56 by $0.02. The company 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 1.57% and a return on equity of 6.18%. Southwest Airlines’s revenue for the quarter was up 7.4% on a year-over-year basis. During the same period in the previous year, the firm 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. On average, analysts predict that Southwest Airlines will post 1.55 earnings per share for the current year.

Southwest Airlines Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, January 16th. Stockholders of record on Friday, December 26th were given a $0.18 dividend. The ex-dividend date of this dividend was Friday, December 26th. This represents a $0.72 annualized dividend and a dividend yield of 1.5%. Southwest Airlines’s dividend payout ratio is presently 85.71%.

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.