Southwest Airlines (LUV) 2Q26: Strong 2Q beat, weaker than expected 3Q and back-end loaded FY guide

Research evidence excerpt

Southwest Airlines (LUV) 2Q26: Strong 2Q beat, weaker than expected 3Q and back-end loaded FY guide

h in the marketplace, intensified competition among carriers, upward volatility in fuel.

Upside risk is that the MAX return is smoother than expected and attempts to optimize the network are successful enough to offset

both lower utilization of aircraft and a suboptimal fleet caused by delays of MAX 7 aircraft. Other upside risks include a faster than

expected transformation of the in-cabin product, higher than expected rationalization of under-performing low cost capacity, and

a significant uplift in the economy.

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EQUITY RATINGS DEFINITIONS

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stocks listed on the U.S. and Canadian exchanges, versus the Bloomberg Europe Developed Markets Large and Mid Cap Price

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(ex-Japan) exchanges -unless otherwise specified.

The Bernstein brand has three categories of ratings:

• Outperform: Stock will outpace the market index by more than 15 pp

• Market-Perform: Stock will perform in line with the market index to within +/-15 pp

• Underperform: Stock will trail the performance of the market index by more than 15 pp

Coverage Suspended: Coverage of a company under the Bernstein research brand has been suspended. Ratings and price targets