New York, Jan 30, 2026, 14:50 EST — Regular session.
- Southwest Airlines shares slipped roughly 1% in afternoon trading, following Thursday’s surge of 18.7%
- Carrier’s updated profit forecast and fee-based restructuring remain under scrutiny
- BMO upgrades its rating to outperform and hikes the target price
Shares of Southwest Airlines Co slipped 1.1% to $47.99 in Friday afternoon trading, retreating after Thursday’s strong rally. Investors seemed to be digesting how much of the recent upbeat sentiment is already baked into the stock price.
The retreat comes after Thursday’s 18.7% surge, driven by the carrier’s upgraded annual profit outlook that pushed it to the top of the S&P 500’s percentage gainers. (Investing)
This move counts because Southwest aims to boost profits per seat, not just increase occupancy, shifting away from its longtime no-frills, straightforward approach.
Late Wednesday, Dallas-based Southwest Airlines reported its Q4 and full-year results, highlighting a broad “transformation” effort that now includes bag fees, a basic economy fare, plus assigned and extra-legroom seating. The airline projected adjusted EPS of at least $4.00 for 2026 and at least $0.45 for Q1. Unit revenue — sales per seat mile flown — is expected to climb at least 9.5% this quarter despite disruption from Winter Storm Fern. “Last year we implemented the most ambitious transformation in Company history,” CEO Bob Jordan said. (Southwest Airlines Co.)
Friday saw BMO Capital lift its rating on Southwest from “market perform” to “outperform,” boosting the price target to $57.50 from $43.00. The upgrade reflects confidence in the airline’s current initiatives and the upside suggested by management’s earnings guidance. (Investing)
Shares of other U.S. airlines slipped as well, with Delta Air Lines dropping 0.9%, United Airlines sliding 1.7%, and American Airlines down 1.3%. The U.S. Global Jets ETF lost 1.4%.
Southwest is adding fees and fare fences similar to those used by its larger competitors, but the danger is that customers might resist the higher costs. With a history of operational hiccups, the airline has less margin for error this time around.
Southwest said its new assigned-seat and extra-legroom options might boost earnings more, depending on traveler demand, with clearer feedback expected within a month. Investors are also eyeing the April quarterly update, when the company plans to share more detailed profit guidance for 2026 — or potentially earlier. (Reuters)
