Southwest Airlines $LUV ( ▲ 3.73% ) took flight Friday after receiving a rare double upgrade from JPMorgan, sending shares up about 4% shortly after the opening bell and pushing the stock to its highest level since 2022.
The bullish call marks a sharp shift in sentiment around an airline that’s spent the past few years playing defense.
JPMorgan Flips the Script
JPMorgan Chase upgraded Southwest from underweight to overweight and raised its price target from $36 to $60, a roughly 66% increase.
Analyst Jamie Baker said the airline has a credible path to earning $5 per share in 2026, a level he described as “attractively probable” and well above current Wall Street expectations. If realized, that earnings power would materially reset how the market values the stock.
The Southwest Advantage Reappears
Baker pointed to Southwest’s long-standing strengths as key reasons for the upgrade. The airline has one of the industry’s deepest track records of profitability, maintains an investment-grade balance sheet, and continues to benefit from a loyal customer base.
While the company has faced operational hiccups and criticism for being slow to adapt, JPMorgan said those issues appear to be stabilizing as management executes on revenue-enhancing changes.
Bags, Seats, and New Revenue Levers
One of the biggest shifts has been Southwest’s willingness to rethink its long-held traditions. Bag fees helped drive record third-quarter revenue in October, signaling that customers are willing to tolerate changes in exchange for competitive fares.
More changes are coming. Later this month, Southwest plans to roll out assigned seating, opening the door to new seating tiers and higher-priced premium options. For investors, that evolution suggests Southwest may finally be unlocking revenue streams its peers have monetized for years.
Taken together, JPMorgan’s call signals growing confidence that Southwest’s turnaround is gaining altitude and that the airline’s best days may no longer be stuck in the rearview mirror.