Wall Street finally blinked. For decades, Southwest Airlines was the stubborn outlier of the skies, clinging to its "open seating" gospel like a religious tenet while every other carrier sliced and diced their cabins into a dozen different price points. But look at the southwestern airlines share price lately and you’ll see the market is betting on a new reality.
As of mid-January 2026, Southwest (NYSE: LUV) is trading around **$43.12**, hovering near three-year highs. If you’ve been following this stock, you know that’s a massive swing from the mid-$20s we saw last year. People are calling it a "pivot to premium," but honestly, it’s a desperate—and potentially brilliant—reinvention.
The $60 Price Target: Is Jamie Baker Right?
JPMorgan’s Jamie Baker recently dropped a double-upgrade on LUV, skipping right past "Neutral" to "Overweight" and slapping on a $60 price target. That’s bold. Most analysts were scratching their heads, figuring 2026 earnings would hit maybe $3.00 a share. Baker is out here projecting **$5.00 per share**.
Why the sudden optimism?
Basically, it’s the seating. On January 27, 2026, the "Wild West" of Southwest boarding officially dies. No more sprinting for the exit row or praying you don’t end up in a middle seat between two linebackers. The airline is finally launching assigned seating and a premium class with extra legroom.
Investors love this because it lets Southwest charge for stuff they used to give away for free. We’re talking about new fare tiers:
- Basic: The "back of the bus" seats assigned at check-in.
- Choice & Choice Preferred: Standard seats you pick at booking.
- Choice Extra: The holy grail—extra legroom and early boarding.
It’s a classic margin play. By segmenting the cabin, Southwest is finally chasing the high-margin business travelers who stayed away because they couldn't guarantee a specific seat. If they can capture even a fraction of Delta’s premium-heavy audience, the southwestern airlines share price has plenty of room to run.
Transatlantic Dreams and Turkish Alliances
If you thought assigned seats were the only change, you haven't been paying attention to the route map. Southwest is currently undergoing the most radical geographic shift in its 50-year history.
They aren't just flying to Des Moines and Dallas anymore.
Through new interline agreements with Turkish Airlines, Condor, and Icelandair, Southwest is effectively entering the transatlantic market. You can now book a single ticket from a domestic Southwest hub, fly to a gateway like Frankfurt or Istanbul, and have your bags checked through to over 350 destinations worldwide.
It's a clever move. Southwest gets to offer global reach without the crippling expense of buying and maintaining a long-haul fleet of widebody jets. They’re sticking to their Boeing 737s for the domestic legs and letting their partners handle the big oceans.
The Execution Risk Nobody Wants to Talk About
Look, the charts look great. We’re seeing a "Golden Cross" where the 50-day moving average has climbed above the 200-day. Technical traders are salivating. But there is a massive "if" here.
Can Southwest actually pull this off without breaking their culture?
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The airline’s operational reliability has been… spotty, to put it politely. Transitioning to a complex, tiered seating model requires a total overhaul of their IT systems and gate procedures. If the January 27 rollout is a mess of delays and confused passengers, that southwestern airlines share price will retreat faster than a plane in a tailwind.
Also, fuel costs are still a wildcard. While they’ve managed to cut about $370 million in costs recently, a spike in oil prices would eat those gains in a heartbeat.
What This Means for Your Portfolio
If you’re holding LUV or thinking about jumping in, the narrative has shifted from "struggling low-cost carrier" to "growth-oriented turnaround play."
Current Technicals:
- 52-Week High: $45.02
- 52-Week Low: $23.82
- P/E Ratio: Roughly 66 (high, but reflecting future earnings expectations)
- Dividend: $0.18 quarterly (about a 1.6% yield)
The short interest is unwinding, down nearly 20% in the last reporting period. This means the "bears" are covering their positions, which often provides even more fuel for a rally.
Actionable Strategy for 2026
Don't just watch the ticker; watch the boarding gates. The success of the "Choice Extra" seating rollout in late January is the only metric that matters right now. If early booking data shows that people are actually paying the premium for those front-row seats, the JPMorgan $60 target starts looking less like a fantasy and more like a roadmap.
If you’re risk-averse, wait for the first post-pivot earnings report in April. But if you believe the "LUV" brand still has enough juice to reinvent itself, the current support levels near $40-$41 offer a reasonable entry point before the next leg up.
Keep an eye on the southwestern airlines share price relative to the $45 resistance level. If it breaks through that with high volume, we’re likely heading into a new era for the stock.