Dallas, Texas-based Southwest Airlines Co. (LUV) is a passenger airline company offering scheduled air transportation services in the U.S. and near-international markets. Valued at $15.7 billion by market cap, the company provides in-flight entertainment, the Rapid Rewards loyalty program, digital platforms like SWABIZ for business travel, and extra services including Southwest's EarlyBird Check-In, upgraded boarding, and pet and unaccompanied minor transportation.
Shares of this airline giant have underperformed the broader market over the past year. LUV has declined 3.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 17.7%. In 2025, LUV’s stock fell 9.9%, compared to the SPX’s 16.3% rise on a YTD basis.
Narrowing the focus, LUV’s underperformance is also apparent compared to the U.S. Global Jets ETF (JETS). The exchange-traded fund has gained about 6.8% over the past year. Moreover, the ETF’s 2.8% losses on a YTD basis outshine the stock’s dip over the same time frame.
On Oct. 22, LUV reported its Q3 results, and its shares closed down more than 6% in the following trading session. Its adjusted EPS of $0.11 surpassed Wall Street expectations of $0.01. The company’s revenue was $6.95 billion, missing Wall Street forecasts of $6.97 billion.
For the current fiscal year, ending in December, analysts expect LUV’s EPS to grow 13.5% to $1.09 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 21 analysts covering LUV stock, the consensus is a “Hold.” That’s based on four “Strong Buy” ratings, one “Moderate Buy,” 11 “Holds,” one “Moderate Sell,” and four “Strong Sells.”
The configuration has been consistent over the past three months.
On Oct. 24, UBS kept a “Neutral” rating on LUV and lowered the price target to $33, implying a potential upside of 8.9% from current levels.
The mean price target of $33.12 represents a 9.3% premium to LUV’s current price levels. The Street-high price target of $46 suggests an ambitious upside potential of 51.8%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
