Key Highlights

  • TD Cowen reduced its LUV price target to $46 from $56, keeping its Buy rating intact
  • Goldman Sachs maintains the Street’s most pessimistic stance with a Sell rating and $30 target
  • Jet fuel costs have climbed approximately 70% following the escalation of the U.S.-Israel conflict with Iran
  • LUV ranked among Thursday’s poorest performers in the S&P 500, declining 1.6%
  • The average analyst price target stands at $43.72 with a Hold consensus rating

Southwest Airlines (LUV) experienced a 1.6% decline Thursday as elevated jet fuel costs and continuing Middle East tensions created headwinds for airline stocks industry-wide.


LUV Stock Card
Southwest Airlines Co., LUV

President Trump’s Wednesday address failed to meet Wall Street expectations for a swift resolution to the conflict. His remarks indicated the military engagement could extend longer than anticipated, maintaining upward pressure on fuel expenditures.

Jet fuel costs have surged roughly 70% since hostilities with Iran commenced. The U.S. Gulf Coast Kerosene-Type Jet Fuel Spot price reached $4.344 per gallon on March 20 — marking the highest level recorded since May 2022. Prior to the conflict on Feb. 27, the price registered $2.428 per gallon.

TD Cowen analyst Tom Fitzgerald revised his LUV price target downward from $56 to $46 Thursday while preserving a Buy rating. The updated target suggests potential upside of approximately 27.8% from Thursday’s closing price.

Fitzgerald expressed his team’s doubts regarding “the resiliency of travel demand” considering the probability of sustained elevated energy prices and weakening credit card spending data. He adjusted projections downward for all six major U.S. carriers, emphasizing fuel costs appear positioned to remain elevated through the end of 2026.

LUV traded alongside other declining carriers. United Airlines dropped 3% to $92.21, Delta decreased 1.2%, JetBlue declined 0.7%, and American Airlines fell 2.6%. The U.S. Global JETS ETF retreated 1.4%.

TD Cowen identified American Airlines, JetBlue, and Alaska Air Group as the carriers facing the greatest fuel price exposure, pointing to elevated leverage ratios and heightened fuel sensitivity.

Wall Street Analysts Reduce Price Expectations

Current analyst sentiment toward LUV remains divided. Eight analysts assign it a Buy rating, eight recommend Hold, and four rate it Sell. The consensus price target averages $43.72.

Goldman Sachs lowered its target to $30 from $32 while maintaining a Sell rating. Bank of America reduced its target to $40 and retained an Underperform rating. Wells Fargo decreased to $44 with an Equal Weight stance. Raymond James cut to $45 from $55, and BMO reduced to $45 from $57.50.

Among the bullish voices, Barclays upgraded LUV to Overweight in December with a $56 target. Jefferies increased its target modestly to $42 while keeping a Hold rating.

Latest Quarterly Results Show Revenue Shortfall

LUV reported its most recent quarterly results on January 28. The airline delivered EPS of $0.58, exceeding the $0.56 consensus estimate by $0.02.

Revenue totaled $7.44 billion, falling slightly short of the $7.51 billion analyst projection. The figure represents a 7.4% increase year-over-year.

Southwest has issued FY2026 EPS guidance of $4.00 and Q1 2026 EPS guidance of $0.45. The stock trades within a 52-week range of $23.82 to $55.11.

The 50-day moving average stands at $45.70, significantly above the current trading price of $37.61.