Rothschild & Co Redburn raised Southwest Airlines to Neutral from Sell on Sept. 18 and lifted its price target to $40 from $35, saying valuation had improved and gains from its product shift beat expectations. It kept Buy ratings on Delta and United.
Analyst James Goodall said Southwest’s reserved-seating and extra-legroom changes had delivered stronger-than-expected early gains, with ancillary revenue becoming its fastest-growing passenger-revenue component after their introduction. He cited first-half 2026 leisure and premium demand and higher domestic fares in maintaining Buy ratings on Delta and United. He also pointed to capacity limits, weaker low-cost competition and retirements of older short-haul aircraft as factors that could restrain supply, while international demand and wide-body aircraft constraints favored the two carriers’ global networks over Southwest’s domestic focus.
The number of hedge funds holding Delta rose from 68 in the first quarter to 75 in the second; United’s count increased from 68 to 73, and Southwest’s from 54 to 57. Short interest was 3.86% of Delta’s float, 5.42% of United’s and 5.82% of Southwest’s, the highest of the three.
