In a report released yesterday, David Vernon from Bernstein maintained a Hold rating on Southwest Airlines, with a price target of $31.00.
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David Vernon’s rating is based on Southwest Airlines’ recent financial performance and future outlook. The company reported a stronger-than-expected third quarter in 2025, with adjusted earnings per share and revenue exceeding analysts’ predictions. However, the guidance for the fourth quarter suggests that Southwest is not on track to meet its earlier expectations, particularly in terms of earnings before interest and taxes (EBIT).
Despite the positive third-quarter results, the anticipated earnings for the fourth quarter are significantly lower than what was previously projected, primarily due to lower fuel costs not being fully passed through. Additionally, the unit revenue growth forecast has been revised downward, indicating potential challenges in achieving revenue initiatives. These factors contribute to a cautious outlook, as they suggest limited upside potential for future earnings, leading to Vernon’s Hold rating on the stock.
According to TipRanks, Vernon is a 4-star analyst with an average return of 7.4% and a 59.65% success rate. Vernon covers the Industrials sector, focusing on stocks such as United Airlines Holdings, Norfolk Southern, and Union Pacific.
In another report released on October 15, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $36.00 price target.