Dallas, Texas-based Southwest Airlines Co. (LUV) is one of the largest airlines in the United States. Valued at a market cap of $21.3 billion, the company is known for offering affordable fares, frequent flights, and a simple, customer-friendly service model. It is scheduled to announce its fiscal Q4 earnings for 2025 before the market opens on Thursday, Jan. 29.
Before this event, analysts expect this airline company to report a profit of $0.55 per share, down 1.8% from $0.56 per share in the year-ago quarter. The company has surpassed Wall Street’s bottom-line estimates in three of the last four quarters, while missing on another occasion. Its earnings of $0.11 per share in the previous quarter handily exceeded the forecasted figure of $0.01.
For the current fiscal year, ending in December, analysts expect LUV to report a profit of $0.93 per share, down 3.1% from $0.96 per share in fiscal 2024. Nonetheless, its EPS is expected to rebound and grow by 229% year-over-year to $3.06 in fiscal 2026.
Shares of LUV have surged 23% over the past 52 weeks, outpacing both the S&P 500 Index's ($SPX) 16.8% return and the State Street Industrial Select Sector SPDR ETF’s (XLI) 18.6% uptick over the same time period.
LUV delivered mixed Q3 results on Oct. 22, and its shares tumbled 6.3% in the following trading session. While the company's overall revenue improved 1.1% year-over-year to $6.9 billion, it still fell short of analyst estimates by a slight margin, which might have made investors jittery. However, on a positive note, its adjusted EPS of $0.11 handily exceeded Wall Street expectations of $0.01 and is expected to deliver meaningful margin expansion in the fourth quarter.
Wall Street analysts are cautious about LUV’s stock, with an overall "Hold" rating. Among 23 analysts covering the stock, five recommend "Strong Buy," one indicates a "Moderate Buy," 12 suggest "Hold,” one advises "Moderate Sell,” and four suggest “Strong Sell.” While the company is trading above its mean price target of $37.96, its Street-high price target of $56 indicates a 35.7% potential upside from the current levels.
On the date of publication, Neharika Jain 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.
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