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Here's Why Investors Should Bet on Southwest Airlines Stock Now
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Key Takeaways
Southwest Airlines' EPS estimates rose 40.5% for 2026 and 20% for 2027 in 60 days.
LUV shares surged 61% in a year, beating the airline industry's 17.7% rise.
Southwest Airlines returned $2.9B in 2025 and added $750M plus $400M in new buybacks for 2026.
Southwest Airlines (LUV - Free Report) benefited from encouraging expansion initiatives, which boosted the company’s prospects. Shareholder-friendly initiatives are commendable. With these tailwinds, LUV shares have performed impressively on the bourse. If you have not yet taken advantage of its share price appreciation, it’s time to do so.
Let’s delve deeper.
Factors Favoring LUV Stock
Northward Earnings Estimate Revision: The Zacks Consensus Estimate for earnings per share (EPS) has been revised upward by 40.5% over the past 60 days for the current year. For 2027, the consensus mark for EPS has moved 20% north over the same time frame. The favorable estimate revisions indicate brokers’ confidence in the stock.
Robust Price Performance: A look at the company’s price trend reveals that its shares have surged 60.9% over the past year, surpassing the Zacks Transportation – Airline industry’s 18% growth.
Image Source: Zacks Investment Research
Positive Earnings Surprise History: Southwest Airlines has an encouraging earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once in the remaining, delivering an average surprise of more than 100%.
Solid Zacks Rank: LUV currently sports a Zacks Rank #1 (Strong Buy).
Bullish Industry Rank: The industry to which Southwest Airlines belongs currently has a Zacks Industry Rank of 29 (out of 246). Such a favorable rank places it in the top 12% of Zacks Industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group to which it belongs.
A mediocre stock within a strong group is likely to outperform a robust stock in a weak industry. Reckoning the industry’s performance becomes imperative in this context.
Growth Factors: LUV strengthens its global reach by partnering with Turkish Airlines to offer one-ticket transatlantic travel between the United States and Istanbul starting in 2026. This agreement allows LUV to tap into Turkish Airlines’ vast international network, expand customer connectivity and boost brand visibility without operating long-haul flights. The partnership supports Southwest Airlines’ broader strategy to form international alliances, enhance travel options and drive future traffic and revenue growth.
Southwest Airlines demonstrated a strong commitment to shareholder returns by distributing $2.9 billion in 2025 through dividends and accelerated share repurchases. The company further reinforced this strategy by committing an additional $750 million and launching another $400 million repurchase program in early 2026, reflecting confidence in its financial position and future cash flow generation.
Allegiant has an expected earnings growth rate of more than 100% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and met the mark once, delivering an average beat of 23.6%.
Wabtec currently carries a Zacks Rank #2 (Buy).
WAB has an expected earnings growth rate of more than 14.9% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 5.8%.
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Here's Why Investors Should Bet on Southwest Airlines Stock Now
Key Takeaways
Southwest Airlines (LUV - Free Report) benefited from encouraging expansion initiatives, which boosted the company’s prospects. Shareholder-friendly initiatives are commendable. With these tailwinds, LUV shares have performed impressively on the bourse. If you have not yet taken advantage of its share price appreciation, it’s time to do so.
Let’s delve deeper.
Factors Favoring LUV Stock
Northward Earnings Estimate Revision: The Zacks Consensus Estimate for earnings per share (EPS) has been revised upward by 40.5% over the past 60 days for the current year. For 2027, the consensus mark for EPS has moved 20% north over the same time frame. The favorable estimate revisions indicate brokers’ confidence in the stock.
Robust Price Performance: A look at the company’s price trend reveals that its shares have surged 60.9% over the past year, surpassing the Zacks Transportation – Airline industry’s 18% growth.
Image Source: Zacks Investment Research
Positive Earnings Surprise History: Southwest Airlines has an encouraging earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once in the remaining, delivering an average surprise of more than 100%.
Solid Zacks Rank: LUV currently sports a Zacks Rank #1 (Strong Buy).
Bullish Industry Rank: The industry to which Southwest Airlines belongs currently has a Zacks Industry Rank of 29 (out of 246). Such a favorable rank places it in the top 12% of Zacks Industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group to which it belongs.
A mediocre stock within a strong group is likely to outperform a robust stock in a weak industry. Reckoning the industry’s performance becomes imperative in this context.
Growth Factors: LUV strengthens its global reach by partnering with Turkish Airlines to offer one-ticket transatlantic travel between the United States and Istanbul starting in 2026. This agreement allows LUV to tap into Turkish Airlines’ vast international network, expand customer connectivity and boost brand visibility without operating long-haul flights. The partnership supports Southwest Airlines’ broader strategy to form international alliances, enhance travel options and drive future traffic and revenue growth.
Southwest Airlines demonstrated a strong commitment to shareholder returns by distributing $2.9 billion in 2025 through dividends and accelerated share repurchases. The company further reinforced this strategy by committing an additional $750 million and launching another $400 million repurchase program in early 2026, reflecting confidence in its financial position and future cash flow generation.
Other Stocks to Consider
Investors interested in the Zacks Transportation sector may consider Allegiant (ALGT - Free Report) and Wabtec (WAB - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
ALGT currently sports a Zacks Rank #1.
Allegiant has an expected earnings growth rate of more than 100% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and met the mark once, delivering an average beat of 23.6%.
Wabtec currently carries a Zacks Rank #2 (Buy).
WAB has an expected earnings growth rate of more than 14.9% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 5.8%.