Southwest Airlines Co. (LUV)

Between July 2025 and January 2026, Southwest Airlines Co. stock experienced several notable events, including reaching three-year highs after an upgrade from J.P. Morgan Securities due to promising 2026 earnings prospects. Other analysts adjusted their ratings and price targets, and the shares were up 7% since the start of 2026 and 34% year over year as of January 9, 2026. In December 2025, Southwest's stock outperformed other U.S. airline stocks, and the company announced an international partnership with Turkish Airlines. Earlier in December, LUV briefly hit 52-week highs despite a reported drop in demand due to a government shutdown, and the company raised its forecast for fourth-quarter revenue per available seat mile (RASM). In October 2025, Southwest reported mixed Q3 results, with revenue missing estimates, leading to a stock plunge, despite adjusted EPS beating expectations.

Southwest Airlines experiences strong travel demand during holiday seasons and the summer months. The company reported better-than-expected bookings during the Q4 2024 holiday season and projected continued strong demand into Q1 2025. Consumer spending on travel has remained consistent, and the resurgence of business travelers post-pandemic is also a positive factor for the industry. While demand can be impacted by external events, bookings tend to recover to expected levels.

Southwest Airlines is a major American low-cost airline known for its low-cost business model, customer-friendly policies, and efficient operations, primarily offering passenger air transportation within the United States and to near-international markets. The company also provides a Rapid Rewards loyalty program and inflight entertainment and connectivity services. Southwest began transforming its product in 2025 by introducing paid premium seating, extra legroom seats, and basic economy offerings, with a full fleet retrofit planned between April and the end of 2025.

Southwest Airlines serves over 100 destinations across 42 U.S. states, Washington, D.C., and Puerto Rico, with a near-international network including 10 countries in the Gulf of Mexico and Caribbean Sea regions. Southwest utilizes a point-to-point system with focus cities rather than a traditional hub-and-spoke model. The airline has been expanding into primary airports in the 21st century and began international service in 2014, with plans to begin service to Alaska in 2026.

Southwest Airlines has maintained a strong brand reputation over the past year, being recognized on Fortune's World's Most Admired Companies™ list for 2024 and consistently appearing on the list since 2009. In Q1 2025, Southwest reported a Net Promoter Score (NPS) of 48, and the airline was named #1 in Customer Satisfaction among Economy Class Passengers by J.D. Power for four consecutive years as of 2025. Operationally, Southwest demonstrated strong performance in 2025, operating 98.3% of its published flight schedule without cancellations. However, the company's decision to introduce paid premium seating and assigned seating has generated some customer pushback.

Institutional investors hold a significant portion of Southwest Airlines' stock, ranging from approximately 65.90% to 89.28%, with the top 10 institutional investors collectively owning 60% of the company. Insiders own about 1.04% of the stock, while public companies and individual investors (retail investors) hold approximately 9.68% to 23.38%.