Barclays upgrades Southwest to Overweight on new strategy

Barclays upgraded Southwest (LUV) to Overweight from Equal Weight with a price target of $56, up from $34. The firm is positive on the company’s new commercial strategy, which includes assigned seating and bag fees. Following several years of a “stagnant if not contracting” industrial economy for freight carriers and a volatile air travel market, Barclays sees “idiosyncratic stock opportunities” across the transports and airlines, the analyst tells investors in a research note. The firm expects Southwest’s new strategy to drive “material improvement” in its relative revenue generation, especially in early 2026 as extra legroom and assigned seating options go live.