You’ve probably seen the headlines. Southwest Airlines, the carrier that practically invented the "no-frills, just-love" vibe, is fundamentally changing. And honestly, the Southwest Airlines stock price is finally starting to reflect that reality. For years, investors viewed LUV as the stable, predictable sibling in a volatile industry. But the 2025 transformation has turned that predictability on its head.
Right now, as of mid-January 2026, the stock is hovering around $43.12. That’s a massive jump from where it sat a year ago, when it was struggling to stay above the $30 mark. It’s not just a "bounce." It's a re-rating.
What’s actually driving the price up?
The big news—the stuff that actually moves the needle—isn't just more people flying. It's the "Southwest 2.0" plan. Last week, JP Morgan analyst Jamie Baker issued a rare double upgrade on the stock, pushing a price target of $60. That’s bold. He’s looking at a potential earnings-per-share (EPS) of $5 for 2026.
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To put that in perspective, the market consensus was languishing around $2.98. Why the sudden optimism? Basically, Southwest stopped being "too nice" to its bottom line. They finally caved on assigned seating and extra-legroom seats, which are launching later this month on January 27, 2026.
Southwest Airlines stock price and the activist impact
You can't talk about this stock without mentioning Elliott Investment Management. They came in swinging in late 2024, demanding the airline grow up and monetize its passengers better. They wanted blood, or at least, higher margins.
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Elliott recently trimmed their stake to about 13.1%, but their fingerprints are everywhere. Because of that pressure, Southwest killed the open-seating model that fans loved but accountants hated. They even started charging for bags in certain tiers. It’s a culture shock for the "Bags Fly Free" crowd, but for the Southwest Airlines stock price, it’s fuel.
- Assigned Seating: Expected to bring in $1 billion in incremental EBIT this year.
- Red-eye flights: Started in 2025 to keep planes in the air longer.
- New Partnerships: A surprise deal with Turkish Airlines is opening up transatlantic connections through hubs like Baltimore and Nashville.
The skeptical view: Is it a trap?
Not everyone is buying the hype. Goldman Sachs maintained a "Sell" rating with a $29 target just a few days ago. Their argument? Execution risk.
Ripping out seats to add legroom and changing a 50-year-old boarding process is expensive and messy. If the "loyalists" actually leave because they hate the new Southwest, that $5 EPS target becomes a pipe dream. Plus, the airline is still heavily reliant on Boeing. We’ve all seen how those delivery delays can wreck a flight schedule.
Southwest’s current P/E ratio is sitting quite high, over 60x, which looks expensive compared to Delta or United. Bulls say this is because the earnings are about to explode. Bears say it's just overvalued.
Real-world numbers to watch
If you're looking at your brokerage account, keep these recent markers in mind. The 52-week high is $45.02, which we’re bumping up against right now. The 52-week low? A measly $23.81.
- Next Earnings Date: January 21, 2026. This is the big one.
- Dividend: They’re still paying out $0.18 per share quarterly, a yield of about 1.6%.
- Revenue Target: They are aiming for $4.3 billion in incremental EBIT from these new initiatives by the end of the year.
Southwest is no longer the "wacky" airline with the funny flight attendants. It's a revenue-generating machine trying to mimic the big boys. Whether the Southwest Airlines stock price keeps its momentum depends entirely on whether those January 27th changes go off without a hitch.
Actionable Insights for Investors
If you're holding or watching LUV, your next move shouldn't be based on nostalgia for the old Southwest. Focus on the January 21st earnings call. Watch specifically for "RASM" (Revenue per Available Seat Mile) guidance. If management confirms they are on track for that $1 billion boost from assigned seating, the $50 level is the next logical psychological barrier. However, if the "Technical Operations" team reports delays in retrofitting the Boeing 737-700 fleet with those new premium seats, expect a sharp correction back toward the 200-day moving average of $34.
Set a price alert for $45.50. Breaking that 52-week high with high volume would be a strong technical signal that the JP Morgan $60 thesis is gaining mainstream steam. Conversely, a drop below **$37** would suggest the market is losing faith in the "Southwest 2.0" execution.