UBS Boosts Southwest Airlines Price Target to $73, Citing Seating and Bag-Fee Initiatives
UBS upgraded Southwest Airlines to Buy and raised its 12-month price target to $73 from $51, implying roughly 43% upside. UBS forecasts 2026 EPS of $5.05 and 2027 EPS of $6.07, over 20% above consensus, driven by $4.25-$4.50 of EPS from extra-legroom and assigned seating plus $1bn-$1.5bn of bag-fee EBIT.
1. Upgrade and Price Target
UBS upgraded Southwest Airlines from Neutral to Buy and increased its 12-month price target to $73 from $51, representing a roughly 43% upside potential for the stock. The upgrade reflects confidence in the carrier’s new revenue initiatives and stronger profitability outlook.
2. Earnings and Cash Flow Drivers
UBS now forecasts fiscal 2026 EPS of $5.05 and 2027 EPS of $6.07, more than 20% above consensus estimates. The firm expects $4.25-$4.50 of incremental EPS from extra-legroom and assigned-seating initiatives and $1bn-$1.5bn of additional EBIT from checked bag fees by full maturity in fiscal 2027.