Southwest Airlines (NYSE:LUV) Cut to “Strong Sell” at Zacks Research

Posted by Geri Gentry on Oct 9th, 2026

Zacks Research cut shares of Southwest Airlines (NYSE:LUV – Free Report) from a hold rating to a strong sell rating in a research note released on Tuesday,Zacks reports. Zacks Research also issued estimates for Southwest Airlines’ Q3 2026 earnings at $0.74 EPS, Q4 2026 earnings at $1.18 EPS, FY2026 earnings at $3.31 EPS, Q3 2027 earnings at $1.06 EPS, Q4 2027 earnings at $1.99 EPS, FY2027 earnings at $5.02 EPS, Q3 2028 earnings at $1.07 EPS and FY2028 earnings at $5.90 EPS.

Several other equities analysts have also recently commented on LUV. Wells Fargo & Company boosted their price objective on shares of Southwest Airlines from $44.00 to $50.00 and gave the company an “equal weight” rating in a research note on Tuesday, June 30th. BMO Capital Markets lowered their target price on shares of Southwest Airlines from $60.00 to $50.00 and set an “outperform” rating on the stock in a research note on Monday, September 28th. Jefferies Financial Group raised their price target on shares of Southwest Airlines from $44.00 to $50.00 and gave the company a “hold” rating in a report on Wednesday, July 1st. Wall Street Zen cut shares of Southwest Airlines from a “buy” rating to a “hold” rating in a report on Saturday, September 5th. Finally, The Goldman Sachs Group increased their price objective on Southwest Airlines from $30.00 to $35.00 and gave the stock a “sell” rating in a research report on Thursday, July 2nd. Nine equities research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and four have given a Sell rating to the company. Based on data from MarketBeat.com, Southwest Airlines currently has an average rating of “Hold” and an average price target of $47.45.

Get Our Latest Stock Report on LUV

Southwest Airlines Stock Performance

Shares of LUV opened at $41.41 on Tuesday. Southwest Airlines has a 52-week low of $29.26 and a 52-week high of $55.11. The stock’s 50-day simple moving average is $41.83 and its 200 day simple moving average is $42.76. The company has a debt-to-equity ratio of 0.54, a quick ratio of 0.42 and a current ratio of 0.49. The stock has a market capitalization of $20.26 billion, a price-to-earnings ratio of 25.41, a price-to-earnings-growth ratio of 0.41 and a beta of 1.16.

Southwest Airlines (NYSE:LUV – Get Free Report) last posted its earnings results on Wednesday, July 22nd. The airline reported $0.94 earnings per share for the quarter, beating analysts’ consensus estimates of $0.52 by $0.42. Southwest Airlines had a return on equity of 14.15% and a net margin of 2.78%.The business had revenue of $8.72 billion during the quarter, compared to analyst estimates of $8.58 billion. During the same quarter in the previous year, the firm earned $0.43 EPS. The company’s quarterly revenue was up 16.4% compared to the same quarter last year. Southwest Airlines has set its FY 2026 guidance at 3.250-4.250 EPS and its Q3 2026 guidance at 0.500-0.750 EPS. Research analysts forecast that Southwest Airlines will post 3.13 EPS for the current fiscal year.

Southwest Airlines Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Thursday, September 24th. Shareholders of record on Thursday, September 3rd were given a dividend of $0.18 per share. The ex-dividend date was Thursday, September 3rd. This represents a $0.72 annualized dividend and a yield of 1.7%. Southwest Airlines’s payout ratio is presently 44.17%.

Hedge Funds Weigh In On Southwest Airlines

A number of institutional investors have recently made changes to their positions in the stock. QRG Capital Management Inc. raised its position in shares of Southwest Airlines by 8.0% during the 2nd quarter. QRG Capital Management Inc. now owns 35,341 shares of the airline’s stock valued at $1,817,000 after buying an additional 2,632 shares in the last quarter. Envestnet Asset Management Inc. grew its position in Southwest Airlines by 12.2% in the second quarter. Envestnet Asset Management Inc. now owns 718,567 shares of the airline’s stock worth $36,949,000 after acquiring an additional 77,989 shares in the last quarter. WINTON GROUP Ltd grew its position in Southwest Airlines by 218.8% in the second quarter. WINTON GROUP Ltd now owns 93,837 shares of the airline’s stock worth $4,825,000 after acquiring an additional 64,402 shares in the last quarter. Engineers Gate Manager LP increased its stake in Southwest Airlines by 75.1% in the second quarter. Engineers Gate Manager LP now owns 814,820 shares of the airline’s stock valued at $41,898,000 after acquiring an additional 349,394 shares during the last quarter. Finally, RFG Advisory LLC increased its stake in Southwest Airlines by 8.7% in the second quarter. RFG Advisory LLC now owns 22,992 shares of the airline’s stock valued at $1,182,000 after acquiring an additional 1,836 shares during the last quarter. Institutional investors own 80.82% of the company’s stock.

More Southwest Airlines News

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

Positive Sentiment: Analysts raised several EPS forecasts. Zacks increased its estimates for Q3 and Q4 2026, FY2026, FY2027 and FY2028. Its FY2026 forecast rose to $3.31 from $3.29, while FY2028 increased to $5.90 from $5.83. These revisions suggest expectations for improving profitability, although Zacks still rates the shares “Strong Sell.” MarketBeat Southwest Airlines analyst estimates
Positive Sentiment: Susquehanna’s $45 price target implies potential upside. The firm retained a Neutral rating but reduced its target from $50, indicating limited conviction despite a valuation above the current trading level. Susquehanna Southwest Airlines price target
Positive Sentiment: Southwest is exploring international expansion. The carrier is reportedly leaning toward Boeing’s 787 Dreamliner as its first widebody aircraft, potentially enabling long-haul international routes and opening a new growth avenue. Reuters Southwest Boeing 787 report
Neutral Sentiment: New digital marketing and AI initiatives—including flight planning through ChatGPT and a rewards-focused notification campaign—could improve customer engagement, but their direct financial impact is not yet clear. Southwest Airlines ChatGPT flight planning
Negative Sentiment: Zacks downgraded LUV to “Strong Sell” and named Southwest its Bear of the Day, citing fuel-price risk and concerns that earnings growth may not translate into stock gains. Zacks Southwest Airlines Bear of the Day
Negative Sentiment: Analyst caution remains widespread. Bank of America reaffirmed its Sell rating, while Citi maintained Hold and Susquehanna lowered its price target. Rising oil prices and short-selling activity are adding further pressure to airline shares. Bank of America Southwest Airlines rating

About Southwest Airlines

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Southwest Airlines Co is a U.S. commercial airline headquartered in Dallas, Texas, and listed on the New York Stock Exchange under the symbol LUV. The company was founded in 1967 and began operating scheduled passenger service in 1971, initially serving cities in Texas before expanding across the United States.

Southwest primarily provides scheduled air transportation for passengers and also offers air cargo services. Its operations are centered on a large Boeing 737 fleet, supporting frequent service between major cities and regional airports.