Analyst Thomas Fitzgerald CFA of TD Cowen maintained a Hold rating on Southwest Airlines, boosting the price target to $28.00.
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Thomas Fitzgerald CFA has given his Hold rating due to a combination of factors related to Southwest Airlines’ current strategic initiatives and market positioning. While the company has announced plans to enhance its services, such as introducing airport lounges and new aircraft types, these initiatives are expected to take several years to fully implement and may not immediately close the gap in product and margin compared to full-service carriers.
Fitzgerald notes that while the consensus estimates for FY26 and FY27 appear reasonable, the current initiatives may not be sufficient to achieve competitive parity with full-service airlines. The anticipated transition to a full-service model is expected to add operational complexity and costs, and the company’s valuation multiple may compress to align with its full-service peers. Consequently, the Hold rating reflects a cautious stance on the stock’s potential for outperformance in the near term.
In another report released yesterday, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $34.00 price target.