Southwest Price Prediction: What Wall Street Thinks LUV Is Worth in 2026

Southwest Airlines (NYSE:LUV | LUV Price Prediction) has delivered a nearly 30% gain over the past year, but the last month has been rough. Shares have fallen more than 23% over the past month and are sitting well below their 52-week high of $55.11. Year to date, the stock is down 5.54%, trading around $39 as of March 12.

Most Wall Street analysts carry a cautious stance, with the Street consensus target sitting at $49.17. Jefferies analyst Sheila Kahyaoglu has taken a more measured view, lowering her price target to $41 from $48 while maintaining a Hold rating. That target implies roughly 15% upside from current levels, well below the broader analyst consensus. But can LUV realistically reach $41 by the end of 2026?

Jefferies’ $41 LUV Prediction

Jefferies raised its Q1 fuel cost estimates by about 14% and Q2 estimates by about 30%, citing jet fuel prices that have risen sharply since Southwest issued its initial 2026 guidance. Fuel prices are up approximately 50% from the January average when U.S. airlines set guidance, creating a near-term earnings headwind that drove the target cut. Kahyaoglu’s $41 target reflects the view that Southwest’s transformation is real, but fuel costs cap the near-term upside.

Key Drivers of LUV Stock Performance

1. Transformation EBIT ramp: Southwest is targeting approximately $4.3 billion in incremental EBIT from its transformation initiatives in 2026, up from approximately $1.8 billion in 2025. New revenue streams including assigned seating, bag fees, and basic economy fares are still in early innings, offering compounding revenue potential.
2. Earnings growth guidance: Management guided for at least $4.00 in adjusted EPS for 2026, described as the lower end of internal forecasts, compared to 2025’s $0.93 full-year EPS.
3. Fuel cost normalization in H2: Jefferies currently assumes second-half fuel prices revert toward pre-conflict levels. WTI crude has already declined significantly from its 2022-2023 peaks, and WTI stood at $64.51 in February 2026, far below the $114.84 peak seen in June 2022. A H2 fuel pullback would directly expand margins.

What Will It Take for LUV to Reach $41?

With 491.3 million shares outstanding, reaching the $41 price target would require sustained execution on fuel cost normalization and the EPS recovery. The path requires three things: fuel prices moderating in the second half of 2026, continued consumer adoption of Southwest’s new premium products, and management executing on its $4.00+ EPS commitment. CEO Bob Jordan stated, “That foundation positions us well for long-term success and sets the stage for significant earnings growth this year.”

The primary risk is a sustained fuel price spike that erodes the earnings recovery before it gains traction. Jefferies’ $41 target reflects a credible floor for a carrier executing one of the most ambitious airline transformations in recent history, and the forward P/E of roughly 10x on $4.00+ EPS guidance reflects the market’s current valuation of the carrier’s transformation story.