Southwest Airlines (NYSE: LUV) was upgraded to Overweight from Neutral by JPMorgan, which raised its price target to $60 from $36. Shares rose roughly 4% intraday on Friday following the rating change.

The analyst said there was a meaningful probability that Southwest could issue earnings guidance of $5 per share, a level that would significantly exceed the current 2026 consensus estimate of $2.98 as well as all existing individual forecasts. JPMorgan acknowledged that the market might initially be skeptical of such a guide, given Southwest's uneven guidance track record, which it said likely contributed to the airline's decision to adopt a more streamlined EPS-based guidance framework.

Even so, the firm said that acceptance of guidance meaningfully below $5, combined with unchanged valuation assumptions, could still be sufficient to push the stock above $50 in the near term, paving the way toward a potential $60 valuation. JPMorgan said this analysis led to a double upgrade of the stock to Overweight and the establishment of a new Street-high December 2026 price target of $60.

To underscore its conviction, the firm placed Southwest on Positive Catalyst Watch ahead of the company's upcoming earnings report and 2026 guidance update scheduled for January 29, noting that its updated financial model supported the revised outlook.