Honestly, if you’d told me two years ago that Southwest Airlines would be the "it" stock of 2026, I would’ve laughed. Back then, they were the poster child for operational meltdowns and a business model that felt like it was stuck in 1971. But look at the charts now. Southwest airline stock price today is hovering around $43.12, coming off a blistering run that saw it touch a 52-week high of $45.02 just last week.
This isn't just a random market bounce. It is a full-blown identity crisis turned success story.
The airline just capped off a massive 12-session winning streak. Investors are basically tripping over themselves to get a piece of LUV before the "New Southwest" officially launches its assigned seating and extra-legroom tiers on January 27. For a company that built its entire brand on "sit wherever you want," this is a massive gamble. But the street? They’re buying the hype.
What is Driving Southwest Airline Stock Price Today?
So, why the sudden surge? It basically boils down to the "JPMorgan Effect" and a complete board overhaul that nobody expected to work this smoothly.
Just a few days ago, Jamie Baker’s team at JPMorgan didn't just upgrade the stock; they "double upgraded" it from Underweight to Overweight. They’re calling for a 2026 EPS (earnings per share) of $5.00. To put that in perspective, the rest of the analysts were dreaming of $3.03. If Southwest actually hits that $5 mark, this $43 price tag is going to look like a bargain.
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The Activist Shadow
You can’t talk about LUV without mentioning Elliott Investment Management. They came in swinging in 2024, demanding heads on pikes. While they didn't get CEO Bob Jordan fired, they did manage to force out Executive Chairman Gary Kelly and install five of their own directors.
The result? A "slightly new" Southwest that finally realized it could make more money by—wait for it—charging people for things they actually want. Like not being in the middle seat.
The January 27 Pivot
The big date everyone is circling is January 27, 2026. This is when the old A/B/C boarding poles basically become museum exhibits.
Southwest is moving to eight boarding groups and four new fare bundles:
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- Basic (The "no-frills" budget option)
- Choice
- Choice Preferred
- Choice Extra (The one with the five inches of extra legroom)
Analysts at Barclays are betting this move will finally win back the high-paying business travelers who used to avoid Southwest because they didn't want to participate in the "boarding scrum." If you're a corporate traveler, you want a seat number. You don't want a "position."
Is LUV Overvalued Right Now?
Here is where it gets tricky. If you look at the 2025 earnings, the P/E ratio looks insane—somewhere around 44x. That’s more expensive than some tech stocks.
But investors aren't looking at 2025. They’re looking at 2026.
Based on the projected 2026 earnings of $2.83 (the conservative estimate), the multiple drops to a much more reasonable 14.9x. Compare that to Delta or United, and Southwest suddenly looks like it has room to run. However, the risk is real. If the January 27 rollout has technical glitches or if the "loyalists" who loved the old open-seating model revolt, that stock price could come back to earth fast.
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The Global Play
Something most people are missing in the Southwest airline stock price today conversation is their new international strategy. They just announced a partnership with Turkish Airlines for transatlantic travel and a deal with Condor.
Southwest is no longer just a "short-hop" domestic carrier. They are trying to build a global network without actually buying the massive, expensive wide-body planes themselves. It’s a smart, low-capital way to grow.
Actionable Insights for Investors
If you’re looking at Southwest right now, don't just watch the ticker. Watch the execution.
- Monitor the "Big Flip": The week of January 27 is the ultimate litmus test. If the software holds up and the turn times (how fast they flip a plane at the gate) stay low, the stock likely stays north of $40.
- Watch the EPS Guidance: Keep an eye on the Q4 2025 earnings report coming on January 21. If management confirms that $5.00 EPS target is "attractively probable," the $60 price targets from JPMorgan might actually happen.
- Check the Yields: Look for "RASM" (Revenue per Available Seat Mile) in their reports. If those new "Choice Extra" seats are selling out, it means the strategy is working.
Southwest is finally acting like a "grown-up" airline. It’s less "fun and quirky" and more "efficient and profitable." For the stock price, that’s usually a winning trade.