Update shared on27 Sep 2025
Fair value Increased 1.09%The consensus analyst price target for Southwest Airlines saw a slight upward revision to $32.51 as bullish analysts highlight stronger long-term profit expectations and industry consolidation benefits, while persistent near-term skepticism among others tempers enthusiasm.
Analyst Commentary
- JPMorgan is bullish, citing above-consensus earnings estimates through 2026-2027 and expectations of outsized industry profit consolidation among stronger carriers like Southwest.
- Bullish analysts see Southwest as a long-term beneficiary as profitability remains concentrated among leading U.S. airlines, despite sector-wide recovery challenges.
- Bearish analysts highlight ongoing challenges and a weaker path to profitability for Southwest, especially compared to peers, leading to reduced ratings and price targets.
- There is increasing skepticism in parts of the analyst community regarding Southwest’s near-to-midterm outlook, triggering downgrades.
- Diverging sentiment is driven by differences in broader sector recovery expectations and Southwest’s ability to capture future market share and earnings strength.
What's in the News
- Southwest announced multiple new destinations and route expansions for 2026, including Santa Rosa (CA), St. Thomas (USVI), St. Maarten, and Knoxville (TN), with added nonstop connections and new seasonal routes.
- A new partnership with T-Mobile will provide free unlimited inflight WiFi for all Rapid Rewards members beginning October 2025, making Southwest the largest domestic airline with free WiFi on every flight.
- Southwest entered a new interline agreement with EVA Air, enabling single-itinerary bookings, through-checked baggage, and expanded connectivity between EVA’s US gateways and over 100 Southwest destinations.
- The airline launched Getaways by Southwest, an in-house vacation package product offering bundled air, hotel, car, and travel services, with flexible cancellation and loyalty benefits.
- Southwest expanded customer offerings with assigned and premium seating for purchase, partnered with Peet’s Coffee for inflight service, and added 2025–2026 flights tailored for SEC college football fans.
Valuation Changes
Summary of Valuation Changes for Southwest Airlines
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $32.16 to $32.51.
- The Future P/E for Southwest Airlines remained effectively unchanged, moving only marginally from 9.57x to 9.70x.
- The Discount Rate for Southwest Airlines remained effectively unchanged, moving only marginally from 10.41% to 10.49%.
Disclaimer
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