An Overview of Southwest Airlines's Earnings
Southwest Airlines (NYSE:LUV) is preparing to release its quarterly earnings on Wednesday, 2026-01-28. Here's a brief overview of what investors should keep in mind before the announcement.
Analysts expect Southwest Airlines to report an earnings per share (EPS) of $0.57.
The announcement from Southwest Airlines is eagerly anticipated, with investors seeking news of surpassing estimates and favorable guidance for the next quarter.
It's worth noting for new investors that guidance can be a key determinant of stock price movements.
Earnings Track Record
During the last quarter, the company reported an EPS beat by $0.13, leading to a 6.25% drop in the share price on the subsequent day.
Here's a look at Southwest Airlines's past performance and the resulting price change:
| Quarter | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 |
|---|---|---|---|---|
| EPS Estimate | -0.02 | 0.51 | -0.19 | 0.46 |
| EPS Actual | 0.11 | 0.43 | -0.13 | 0.56 |
| Price Change % | -6.00 | -11.00 | 4.00 | -2.00 |
Performance of Southwest Airlines Shares
Shares of Southwest Airlines were trading at $42.03 as of January 26. Over the last 52-week period, shares are up 32.76%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.
Analyst Insights on Southwest Airlines
Understanding market sentiments and expectations within the industry is crucial for investors. This analysis delves into the latest insights on Southwest Airlines.
Southwest Airlines has received a total of 15 ratings from analysts, with the consensus rating as Neutral. With an average one-year price target of $43.6, the consensus suggests a potential 3.74% upside.
Analyzing Ratings Among Peers
The following analysis focuses on the analyst ratings and average 1-year price targets of LATAM Airlines Group, United Airlines Holdings and Alaska Air Gr, three prominent industry players, providing insights into their relative performance expectations and market positioning.
- Analysts currently favor an Outperform trajectory for LATAM Airlines Group, with an average 1-year price target of $60.0, suggesting a potential 42.76% upside.
- Analysts currently favor an Buy trajectory for United Airlines Holdings, with an average 1-year price target of $140.07, suggesting a potential 233.26% upside.
- Analysts currently favor an Buy trajectory for Alaska Air Gr, with an average 1-year price target of $68.86, suggesting a potential 63.84% upside.
Summary of Peers Analysis
The peer analysis summary provides a snapshot of key metrics for LATAM Airlines Group, United Airlines Holdings and Alaska Air Gr, illuminating their respective standings within the industry. These metrics offer valuable insights into their market positions and comparative performance.
| Company | Consensus | Revenue Growth | Gross Profit | Return on Equity |
|---|---|---|---|---|
| Southwest Airlines | Neutral | 1.15% | $1.16B | 0.68% |
| LATAM Airlines Group | Outperform | 17.06% | $1.18B | 37.55% |
| United Airlines Holdings | Buy | 1.13% | $4.42B | 7.06% |
| Alaska Air Gr | Buy | -3.56% | $575M | 0.52% |
Key Takeaway:
Southwest Airlines ranks in the middle for revenue growth among its peers. It has the lowest gross profit compared to its peers. Southwest Airlines has the lowest return on equity among its peers.
Delving into Southwest Airlines's Background
Southwest Airlines is the largest domestic air carrier in the United States by passengers boarded. Southwest operates nearly 800 aircraft in an all-Boeing 737 fleet. Despite offering some longer routes and a few perks for business travelers, the airline predominantly specializes in short-haul, leisure flights operated in a single, open-seating cabin configuration in a point-to-point network. In early 2026, Southwest will modify its cabins to offer some rows with extra legroom and will update its ticketing process and merchandising to offer assigned seats and more fare categories, including a basic economy class that will more directly compete with other airlines' offerings and appear for the first time in travel aggregators' search results.
Financial Milestones: Southwest Airlines's Journey
Market Capitalization Analysis: With an elevated market capitalization, the company stands out above industry averages, showcasing substantial size and market acknowledgment.
Revenue Growth: Over the 3 months period, Southwest Airlines showcased positive performance, achieving a revenue growth rate of 1.15% as of 30 September, 2025. This reflects a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Industrials sector.
Net Margin: Southwest Airlines's net margin is impressive, surpassing industry averages. With a net margin of 0.78%, the company demonstrates strong profitability and effective cost management.
Return on Equity (ROE): Southwest Airlines's ROE is below industry averages, indicating potential challenges in efficiently utilizing equity capital. With an ROE of 0.68%, the company may face hurdles in achieving optimal financial returns.
Return on Assets (ROA): Southwest Airlines's ROA is below industry averages, indicating potential challenges in efficiently utilizing assets. With an ROA of 0.19%, the company may face hurdles in achieving optimal financial returns.
Debt Management: Southwest Airlines's debt-to-equity ratio is below the industry average. With a ratio of 0.68, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.
To track all earnings releases for Southwest Airlines visit their earnings calendar on our site.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
