TD Cowen raises Southwest Airlines' estimates on management execution, shares climb

Southwest Airlines LUV.N shares rise 3.1% to $42

TD Cowen raises airline's FY26 estimates on more confidence from mgmt's Q4 execution and macro backdrop; expects FY26 adj. EPS of $3.81 vs $2.77 previously

Brokerage says co would have hit the midpoint of their EBIT guidance, if not for shutdown

As we contemplate the stock's performance over the past month, we believe that the multiple did compress but that our earnings outlook was too pessimistic, says brokerage

We can envision further upside should Southwest keep executing, especially on seat initiatives, and the macro backdrop remain favorable - TD Cowen

The new price target represents a 3% upside to stock's last close of $40.74

Six of 25 brokerages rate the stock "buy" or higher, 13 "hold" and 12 "sell"; their median PT is $35 - LSEG data

Including session's move, stock up 25.9% YTD