Southwest Airlines (NYSE:LUV) Upgraded to “Buy” at TD Cowen

TD Cowen upgraded shares of Southwest Airlines (NYSE:LUV) from a hold rating to a buy rating in a report published on Friday morning, Marketbeat reports. TD Cowen currently has $66.00 price target on the airline’s stock, up from their prior price target of $50.00.

A number of other equities analysts have also recently issued reports on LUV. Wells Fargo & Company increased their target price on Southwest Airlines from $45.00 to $50.00 and gave the stock an “equal weight” rating in a report on Friday, January 30th. Wall Street Zen upgraded Southwest Airlines from a “hold” rating to a “buy” rating in a report on Saturday, February 7th. BMO Capital Markets upgraded Southwest Airlines from a “market perform” rating to an “outperform” rating and boosted their target price for the company from $43.00 to $57.50 in a research note on Friday, January 30th. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Southwest Airlines in a research note on Monday, December 29th. Finally, Morgan Stanley boosted their price objective on shares of Southwest Airlines from $50.00 to $55.00 and gave the stock an “overweight” rating in a research report on Friday, January 30th. One equities research analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating, eight have given a Hold rating and three have given a Sell rating to the stock. According to MarketBeat, the company presently has a consensus rating of “Hold” and an average price target of $49.03.

Southwest Airlines Trading Down 3.4%

Shares of LUV traded down $1.73 during trading hours on Friday, reaching $49.20. The stock had a trading volume of 9,144,821 shares, compared to its average volume of 10,303,523. The company has a market cap of $24.17 billion, a P/E ratio of 58.57, a P/E/G ratio of 0.36 and a beta of 1.15. Southwest Airlines has a 52 week low of $23.82 and a 52 week 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 firm has a 50-day moving average of $46.30 and a 200 day moving average of $37.83.

Southwest Airlines (NYSE:LUV) last posted its earnings results on Wednesday, January 28th. The airline reported $0.58 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.56 by $0.02. The firm had revenue of $7.44 billion during the quarter, compared to analysts’ expectations of $7.51 billion. Southwest Airlines had a return on equity of 6.18% and a net margin of 1.57%.The company’s revenue 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, sell-side 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 declared a quarterly dividend, which will be paid on Thursday, April 2nd. Shareholders of record on Thursday, March 12th will be given a dividend of $0.18 per share. This represents a $0.72 dividend on an annualized basis and a yield of 1.5%. The ex-dividend date of this dividend is Thursday, March 12th. Southwest Airlines’s payout ratio is 85.71%.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the business. Arrowstreet Capital Limited Partnership raised its stake in Southwest Airlines by 2,403.8% in the 2nd quarter. Arrowstreet Capital Limited Partnership now owns 10,120,368 shares of the airline’s stock valued at $328,305,000 after acquiring an additional 9,716,160 shares during the period. Norges Bank bought a new position in Southwest Airlines during the fourth quarter worth $172,038,000. Ameriprise Financial Inc. increased its holdings 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 valued at $393,615,000 after purchasing an additional 3,753,183 shares during the last quarter. SG Americas Securities LLC raised its position 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 during the period. Finally, Massachusetts Financial Services Co. MA acquired a new stake in shares of Southwest Airlines during the 4th quarter worth about $143,450,000. 80.82% of the stock is currently owned by institutional investors.

Southwest Airlines News Summary

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

• Positive Sentiment: Management’s overhaul and 2026 guidance are supporting investor confidence — coverage notes the transformation and clearer FY‑2026 targets that helped lift sentiment. A Look At Southwest Airlines (LUV) Valuation As Its Overhaul And 2026 Guidance Boost Investor Confidence
• Positive Sentiment: Product changes (assigned seating, extra‑legroom options, expanded distribution, free Wi‑Fi for Rapid Rewards) plus a large 2025 shareholder return (~$2.9B) are reframing Southwest from a low‑cost carrier to a differentiated, revenue‑enhancing operator. Is Southwest’s Bold Shift To Assigned Seating And Perks Altering The Investment Case For LUV?
• Positive Sentiment: TD Cowen upgraded LUV from Hold to Buy with a $66 price target, signaling analyst optimism and adding potential upside from improved sentiment and coverage. Benzinga note on TD Cowen upgrade
• Positive Sentiment: Short interest dropped meaningfully in February (≈22.6% decline), reducing immediate short‑pressure and indicating some bearish positions have been covered. (Market data summarized publicly.)
• Neutral Sentiment: Recent earnings showed a modest EPS beat but a revenue miss; market reaction since the report has been positive overall (LUV up ~5% since earnings), but investors are now parsing forward guidance and execution risks. Why Is Southwest (LUV) Up 5% Since Last Earnings Report?
• Neutral Sentiment: Analysts and commentators are debating valuation — some see LUV as still attractive given execution and margin upside, while others flag stretched momentum after the recent run. Are Investors Undervaluing Southwest Airlines (LUV) Right Now?
• Negative Sentiment: Sector headwinds: rising crude oil and broader airline weakness (notably United and Delta share drops) are pressuring airline multiples and can offset Southwest’s company‑level gains. United Airlines, Delta Stocks Fall. Why Airlines Are Getting Crushed.
• Negative Sentiment: Investor caution remains because higher industry labor costs and legacy carriers’ balance‑sheet issues keep the sector sensitive to macro shocks, which can trigger short‑term pullbacks even for stronger operators. AAL Benefits From Improved Air-Travel Demand Amid High Costs

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.