Should I Buy LUV? LUV 2026 Analysis

Should You Buy Southwest Airlines Co (LUV) Today? Analysis, Price Targets, and 2026 Outlook.

Conclusion

Hold

Latest Price

48.500

1 Day change

18.70%

52 Week Range

49.090

Analysis Updated At

2026/01/26

Southwest Airlines Co (LUV) is not a strong buy at the moment for a beginner investor with a long-term strategy. While there are positive analyst ratings and a constructive outlook for 2026, the current technical indicators, financial performance, and hedge fund selling trends suggest a cautious approach. The stock's recent price decline and lack of strong proprietary trading signals further support a hold recommendation.

Technical Analysis

The MACD is negatively expanding (-0.352), indicating bearish momentum. RSI is neutral at 37.576, and while moving averages are bullish (SMA_5 > SMA_20 > SMA_200), the stock is trading below key support levels (S1: 42.006, S2: 41.234). This suggests limited immediate upside potential.

Options Data

Neutral

Open Interest Put-Call Ratio

Bullish

Option Volume Put-Call Ratio

Technical Summary

Sell

Buy

Positive Catalysts

Analysts have raised price targets significantly, with JPMorgan upgrading the stock to Overweight and setting a $60 target.
Positive outlook for 2026, with potential for $5 EPS and rebounding demand trends.
New commercial strategy (assigned seating, bag fees) expected to drive revenue growth.

Neutral/Negative Catalysts

Hedge funds are selling heavily, with a 203.52% increase in selling activity last quarter.
Financial performance in Q3 2025 showed declining net income (-19.40% YoY) and EPS (-9.09% YoY), signaling potential challenges.
Winter storm disruptions have recently impacted airline operations, potentially affecting near-term performance.

Financial Performance

In Q3 2025, revenue grew slightly by 1.15% YoY to $6.95 billion, but net income dropped significantly by 19.40% YoY to $54 million. EPS also declined by 9.09% YoY to 0.1, while gross margin improved by 2.23% YoY to 67.29%. Overall, financials show mixed performance with pressure on profitability.

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

Analysts are generally positive, with multiple upgrades and raised price targets. JPMorgan and Barclays have set high targets of $60 and $56, respectively, citing strong 2026 potential and new commercial strategies. However, some analysts remain neutral, highlighting competitive pressures and execution risks.

14 Analyst Rating

Wall Street analysts forecast LUV stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LUV is 44.21 USD with a low forecast of 34 USD and a high forecast of 60 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

4 Buy

9 Hold

1 Sell

Hold

Current: 40.860

Low

Averages

44.21

High

Current: 40.860

Low

Averages

44.21

High

Deutsche Bank

Buy

upgrade

$48 -> $54

AI Analysis

2026-01-29

New

Reason

Deutsche Bank

Price Target

$48 -> $54

AI Analysis

2026-01-29

New

upgrade

Buy

Reason

Deutsche Bank raised the firm's price target on Southwest to $54 from $48 and keeps a Buy rating on the shares. The firm upped estimates following the company's earnings beat.

Jefferies

Hold

maintain

$42 -> $45

2026-01-26

New

Reason

Jefferies

Price Target

$42 -> $45

2026-01-26

New

maintain

Hold

Reason

Jefferies raised the firm's price target on Southwest to $45 from $42 and keeps a Hold rating on the shares. Southwest completed the reconfigurations of its roughly 300 737-700s all in the month of January, on schedule with the January 27 start of flights featuring assigned and extra legroom (ELR) seating, the analyst tells investors. Seat bundles and fare classes are new, notes the analyst, who sees a $1.5B opportunity at a $50 average upsell across a 20% buy-up rate.

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LUV Should I Buy

LUV Should I Buy

Should You Buy Southwest Airlines Co (LUV) Today? Analysis, Price Targets, and 2026 Outlook.

Technical Analysis

Options Data

Technical Summary

Positive Catalysts

Neutral/Negative Catalysts

Financial Performance

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

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