Southwest Airlines (NYSE:LUV) Raised to Hold at HSBC

Southwest Airlines (NYSE:LUV) was upgraded by research analysts at HSBC from a “reduce” rating to a “hold” rating in a research note issued to investors on Friday,Benzinga reports. The firm presently has a $36.10 price target on the airline’s stock, up from their previous price target of $24.40. HSBC’s price target would suggest a potential downside of 4.47% from the company’s previous close.

Other equities analysts have also recently issued reports about the stock. TD Cowen lowered 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 note on Thursday, April 2nd. BMO Capital Markets lowered their price target on shares of Southwest Airlines from $57.50 to $45.00 and set an “outperform” rating on the stock in a research note on Tuesday, March 31st. Bank of America lowered their price target on shares of Southwest Airlines from $42.00 to $40.00 and set an “underperform” rating on the stock in a research note on Wednesday, April 1st. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Southwest Airlines in a research note on Friday, March 27th. Finally, BNP Paribas Exane upped their price target on shares of Southwest Airlines from $24.00 to $33.00 and gave the stock an “underperform” rating in a research note on Tuesday. Eight research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and four have issued a Sell rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of “Hold” and a consensus target price of $43.79.

Southwest Airlines Stock Performance

Shares of LUV opened at $37.79 on Friday. The company has a debt-to-equity ratio of 0.57, a quick ratio of 0.45 and a current ratio of 0.52. The stock has a market capitalization of $18.56 billion, a P/E ratio of 24.38, a P/E/G ratio of 0.44 and a beta of 1.19. The company’s fifty day moving average is $42.96 and its two-hundred day moving average is $40.14. Southwest Airlines has a 1 year low of $24.63 and a 1 year high of $55.11.

Southwest Airlines (NYSE:LUV) last announced its quarterly earnings data on Wednesday, April 22nd. The airline reported $0.45 earnings per share (EPS) for the quarter, meeting the consensus estimate of $0.45. The company had revenue of $7.25 billion for the quarter, compared to analysts’ expectations of $8.46 billion. Southwest Airlines had a net margin of 2.83% and a return on equity of 10.30%. Southwest Airlines’s revenue was up 12.8% compared to the same quarter last year. During the same period in the previous year, the company posted ($0.13) EPS. Southwest Airlines has set its Q2 2026 guidance at 0.350-0.650 EPS. On average, sell-side analysts predict that Southwest Airlines will post 2.72 earnings per share for the current year.

Institutional Investors Weigh In On Southwest Airlines

A number of large investors have recently added to or reduced their stakes in LUV. Norges Bank acquired a new stake in Southwest Airlines in the 4th quarter valued at about $172,038,000. Ameriprise Financial Inc. boosted its stake in shares of Southwest Airlines by 43.7% during the 3rd 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 boosted its stake 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 purchasing an additional 3,606,255 shares during the last quarter. Massachusetts Financial Services Co. MA acquired a new stake in shares of Southwest Airlines during the 4th quarter worth about $143,450,000. Finally, Franklin Resources Inc. lifted its holdings in shares of Southwest Airlines by 7.0% during the 4th quarter. Franklin Resources Inc. now owns 40,200,530 shares of the airline’s stock worth $1,661,488,000 after acquiring an additional 2,626,853 shares during the period. 80.82% of the stock is owned by institutional investors and hedge funds.

Key Southwest Airlines News

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

• Positive Sentiment: Management says its transformation initiatives are in place and drove margin expansion, record first‑quarter revenues and improved operating performance — a structural improvement investors can model into future margins. Read More.
• Positive Sentiment: Raymond James raised its price target, citing stronger-than-expected margin performance from the transformation and higher unit revenues — a sign some analysts view the company’s strategy as working despite headwinds. Read More.
• Neutral Sentiment: Q1 results: EPS of $0.45 met consensus and the company reported $7.25B in revenue (year‑over‑year revenue growth), showing recovery in demand but only modest upside versus expectations. Read More.
• Neutral Sentiment: Analyst notes and transcripts: Earnings‑call transcripts and coverage highlight a turnaround in commercial execution while flagging key risks — useful for modeling scenarios but not a definitive buy/sell trigger. Read More.
• Negative Sentiment: Rising jet‑fuel costs are the dominant near‑term risk — management said higher fuel for the remainder of the year and warned that full‑year guidance is “at risk,” which increases forecast uncertainty and compresses margins. Read More.
• Negative Sentiment: Q2 guidance came in below some analysts’ expectations (EPS guide 0.35–0.65 with midpoint under consensus) and management said updating FY adjusted EPS isn’t productive amid macro/fuel uncertainty — a key reason the shares faded. Read More.
• Negative Sentiment: Multiple market writeups warn the stock may not be priced for a sustained fuel shock; headlines and broker notes are amplifying downside risk until fuel costs stabilize. 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.