Early Bird Prime for February 22, 2026

Southwest Airlines $LUV ( ▲ 0.02% ) has been flying high, soaring 74.74% in the past 12 months. The airline has taken a sharp turn from its traditional model, embracing a profit-focused strategy that has investors buzzing. The stock recently hit a 52-week high.

Just this past week, UBS upgraded Southwest from ‘Neutral’ to ‘Buy’ and raised its price target to $73, up from $51, citing potential gains from Southwest's new initiatives, such as extra-legroom and assigned seating. UBS is estimating an additional $4.25 to $4.50 in earnings per share from these changes, assuming they reach full maturity by fiscal 2027.

But can Southwest really keep climbing at this rate? There are macro risks and airline-sector risks that could make this stock’s ascent as turbulent as a flight through a thunderstorm. The investment case is heavily reliant on new fees, cabin retrofits, and seat segmentation to hit some very aggressive earnings per share targets in 2026–2027. It’s as if Southwest has decided to charge for everything except the air you breathe on board.

Southwest has reversed decades of “bags fly free, no fees, open seating” by introducing bag fees, basic economy, and paid seat selection. The backlash on social media and in the press has been swift, with critics calling it a “money grab” and warning it could erode the loyalty that has historically set the airline apart.

Should you buy Southwest Airlines stock right now in 2026 or avoid it? Here’s the answer…