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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 $18.7 billion by market cap, the company offers inflight entertainment, the Rapid Rewards loyalty program, digital platforms like SWABIZ for business travel, and extra services including Southwest's EarlyBird Check-In, upgraded boarding, and pet and unaccompanied minor transportation.
Shares of this airline giant have underperformed the broader market over the past year. LUV has gained 3.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 23.3%. In 2025, LUV’s stock declined 7%, compared to the SPX’s 3.2% rise on a YTD basis.
Narrowing the focus, LUV’s underperformance is apparent compared to the U.S. Global Jets ETF (JETS). The exchange-traded fund has gained about 39.5% over the past year. Moreover, the ETF’s 4% gains on a YTD basis outshine the stock’s returns over the same time frame.
On Jan. 30, LUV shares closed down more than 1% after reporting its Q4 results. Its adjusted EPS of $0.56 exceeded Wall Street expectations of $0.45. The company’s revenue was $6.9 billion, missing Wall Street forecasts of $7 billion.
For fiscal 2025, ending in December, analysts expect LUV’s EPS to grow 61.5% to $1.55 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,” nine “Holds,” one “Moderate Sell,” and six “Strong Sells.”
This configuration is more bearish than a month ago, with five analysts suggesting a “Strong Sell.”
On Jan. 31, Barclays PLC (BCS) analyst Brandon Oglenski maintained a “Hold” rating on LUV with a price target of $35, implying a potential upside of 12% from current levels.
The mean price target of $32.41 represents a 3.7% premium to LUV’s current price levels. The Street-high price target of $42 suggests an upside potential of 34.4%.
