12 Most Undervalued Travel Stocks To Buy According To Hedge Funds

8. Southwest Airlines Co. (NYSE:LUV)

Number of Hedge Fund Holders: 40

Southwest Airlines Co. (NYSE:LUV) is one of the most undervalued travel stocks to buy according to hedge funds. Susquehanna lifted the price target on Southwest Airlines Co. (NYSE:LUV) to $55 from $45 on February 3 and maintained a Neutral rating on the shares, telling investors that the company has made considerable progress with its turnaround efforts.

It added that Southwest Airlines Co. (NYSE:LUV) is going into 2026 with renewed momentum, supported by its completion of apparently unachievable external and international goals. These include the introduction of bag fees, streamlining of the corporate workforce, and the assigning of extra-legroom seating. Susquehanna stated that although execution risks are still present, it is getting more comfortable with the company’s ability to set and achieve its targets.

The same day, Citi also raised the price target on Southwest Airlines Co. (NYSE:LUV) to $54 from $44 while maintaining a Neutral rating on the shares. The firm stated that it is “tactically bullish” on the airlines sector, and updated targets and estimates in the group after the fiscal Q4 reports.

Southwest Airlines Co. (NYSE:LUV) is involved in the operation and management of a passenger airline. The company also provides ancillary services, including upgraded boarding, transportation of pets and unaccompanied minors, and early bird check-ins. Its operations are spread in the United States, the Commonwealth of Puerto Rico, Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.