☰
According to TheFly, UBS upgraded Southwest to ‘Neutral’ from ‘Sell’ with a price target of $36, while Melius Research upgraded the stock to ‘Hold’ from ‘Sell’ with a price target of $34.
Shares of Southwest Airlines Co (LUV) rose nearly 1% in Thursday’s pre-market session after UBS and Melius Research upgraded the stock.
According to TheFly, UBS upgraded Southwest to ‘Neutral’ from ‘Sell’ with a price target of $36, up from $29.
The brokerage noted that Southwest Airlines’ "increasingly assertive changes" have created the potential for improving financial performance despite the weaker cyclical backdrop airlines currently face.
It also noted that Southwest's recent move to charge for bags indicates the company is taking a "whatever it takes" approach to driving financial improvement.
UBS believes that "aggressive" revenue and cost actions are the "right steps" that should improve Southwest's margins and earnings growth.
Southwest recently announced that it will charge passengers to check bags for the first time.
The airline said it will continue to offer two free checked bags to its Rapid Rewards A-List Preferred Members and customers traveling on Business Select fares and one free checked bag to A-List Members and other select customers.
Southwest said it would credit one checked bag for Rapid Rewards Credit Card members.
However, passengers not qualifying for these free bag options will be charged for their first and second checked bags. The airline did not say how much it intends to charge customers.
Changes will apply to flights booked on or after May 28, 2025.
Meanwhile, Melius Research upgraded the stock to ‘Hold’ from ‘Sell’ with a price target of $34, up from $28.
The firm noted that following three consecutive years of underperformance compared to peers, 2025 appears to be a turning point in which self-help initiatives will stabilize performance.
Melius also said that the airline has made significant strides toward addressing many of its deficiencies and has a path to industry-plus unit revenue performance and potentially better costs in the second half of 2025 and beyond.
On Stocktwits, retail sentiment climbed into the ‘neutral’ territory (50/100) from ‘bearish’ a day ago.
Southwest shares have gained 0.69% in 2025 and over 16% in the past 12 months.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
subscribe to Asianet Newsable WhatsApp channel by clicking here.