Southwest Airlines (NYSE:LUV) Shares Gap Up – Should You Buy?

Southwest Airlines Co. (NYSE:LUV) gapped up before the market opened on Wednesday . The stock had previously closed at $37.87, but opened at $42.68. Southwest Airlines shares last traded at $41.4670, with a volume of 3,928,085 shares trading hands.

Analyst Ratings Changes

A number of research analysts have commented on LUV shares. Wells Fargo & Company reduced their price objective on shares of Southwest Airlines from $50.00 to $44.00 and set an “equal weight” rating on the stock in a research note on Monday, March 16th. UBS Group reduced their price target on shares of Southwest Airlines from $59.00 to $56.00 and set a “buy” rating on the stock in a research report on Monday, March 23rd. Susquehanna reduced their price target on shares of Southwest Airlines from $55.00 to $42.00 and set a “neutral” rating on the stock in a research report on Thursday, April 2nd. Raymond James Financial reduced their price target on shares of Southwest Airlines from $55.00 to $45.00 and set an “outperform” rating on the stock in a research report on Tuesday, March 31st. Finally, TD Cowen reduced their price target on shares of Southwest Airlines from $56.00 to $46.00 and set a “buy” rating on the stock in a research report on Thursday, April 2nd. Eight analysts have rated the stock with a Buy rating, eight have given a Hold rating and four have assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Hold” and an average target price of $43.72.

Southwest Airlines Stock Performance

The stock’s 50-day moving average price is $45.37 and its 200-day moving average price is $39.57. The company has a current ratio of 0.52, a quick ratio of 0.45 and a debt-to-equity ratio of 0.57. The company has a market capitalization of $19.93 billion, a P/E ratio of 48.32, a P/E/G ratio of 0.30 and a beta of 1.19.

Southwest Airlines (NYSE:LUV) last posted its quarterly earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.56 by $0.02. The company had revenue of $7.44 billion for 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%. The company’s revenue for the quarter was up 7.4% on a year-over-year basis. During the same period last year, the firm posted $0.56 EPS. Southwest Airlines has set its FY 2026 guidance at 4.000- EPS and its Q1 2026 guidance at 0.450- EPS. As a group, equities analysts expect that Southwest Airlines Co. will post 1.55 EPS for the current year.

Southwest Airlines Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Thursday, April 2nd. Investors of record on Thursday, March 12th were given a $0.18 dividend. The ex-dividend date was Thursday, March 12th. This represents a $0.72 annualized dividend and a yield of 1.8%. Southwest Airlines’s dividend payout ratio (DPR) is currently 85.71%.

Institutional Trading of Southwest Airlines

Hedge funds have recently bought and sold shares of the company. Cibc World Market Inc. lifted its position in Southwest Airlines by 12.6% in the 3rd quarter. Cibc World Market Inc. now owns 1,916,003 shares of the airline’s stock valued at $61,140,000 after purchasing an additional 214,092 shares during the last quarter. Hussman Strategic Advisors Inc. acquired a new position in Southwest Airlines during the 3rd quarter valued at about $2,010,000. Gradient Investments LLC raised its position in shares of Southwest Airlines by 5.4% during the 3rd quarter. Gradient Investments LLC now owns 578,088 shares of the airline’s stock worth $18,447,000 after buying an additional 29,665 shares in the last quarter. SG Americas Securities LLC raised its position in shares of Southwest Airlines by 2,468.4% during the 4th quarter. SG Americas Securities LLC now owns 3,752,352 shares of the airline’s stock worth $155,085,000 after buying an additional 3,606,255 shares in the last quarter. Finally, Nordea Investment Management AB bought a new stake in shares of Southwest Airlines during the 4th quarter worth about $31,968,000. 80.82% of the stock is currently owned by institutional investors.

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.