Southwest Airlines (LUV) Stock: Buy, Sell, or Hold?
LUV - Southwest Airlines Co.
$42.47
0.63 (1.51%)
▲
5d:
-0.49%
30d:
+10.0%
90d:
-16.41%
WAIT
LOW Confidence
Analysis Updated: Oct 2, 2026 12:00 AM ET
Earnings: Oct 28, 2026
23d
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Interactive Price Chart (1 Month)
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Bottom Line:
📊 MIXED SIGNALS: LUV shows conflicting indicators. Wait for confirmation before entering.
📊 MIXED SIGNALS: LUV shows conflicting indicators. Wait for confirmation before entering.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$92.35
Based on 14.5% avg growth
INTRINSIC VALUE TODAY
$57.34
25.9% Margin of Safety
How this is calculated: We use a Growth Decay Model: starting with analyst consensus growth (adjusted above) and gradually slowing it down to a long-term terminal rate (4%) by Year 5. This provides a more realistic valuation than assuming constant hyper-growth. We then apply a 10.2x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: LUV is currently trading at $42.47, which is considered extended relative to its 30-day fair value range of $38.88 to $41.72. From a valuation perspective, the stock is trading at a discount (Forward PE: 9.1) compared to its historical average (10.2). Remarkably, the market is currently pricing in an annual earnings decline of 3.6% over the next few years. This pessimistic expectation contrasts with the company's recent 20.5% earnings growth, suggesting potential undervaluation if the company simply maintains stability.
Technical Outlook: Technically, LUV is in a downtrend. The price is approaching resistance at $43.20. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: LUV scores 37/100 on our bottoming-setup gauge. Note this measures entry quality, not trend direction — a low score can mean the chart is extended after a strong run (don't chase) or still falling without stabilization; better entries typically come after a pullback toward the 20-day average. Wall Street analysts see significant upside, with an average price target of $49.57 (+16.7%). Current signals suggest waiting for a better entry point before initiating new positions.
Technical Outlook: Technically, LUV is in a downtrend. The price is approaching resistance at $43.20. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: LUV scores 37/100 on our bottoming-setup gauge. Note this measures entry quality, not trend direction — a low score can mean the chart is extended after a strong run (don't chase) or still falling without stabilization; better entries typically come after a pullback toward the 20-day average. Wall Street analysts see significant upside, with an average price target of $49.57 (+16.7%). Current signals suggest waiting for a better entry point before initiating new positions.
Quick Decision Summary
Current Position
EXTENDED
Historical Trading Range
$38.88 -
$41.72
Company Quality Score
52/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
26.2%
Protect Your Profits
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View Profit Protection PlanAll Signals
- BEARISH: Price extended above range
- BEARISH: Weak technical setup (37/100)
- BULLISH: High volume confirmation
- BULLISH: Trading below Wall St target ($49.57)
- WARNING: Composite score 52/100 in the bottom quintile — this cohort historically lags the market
Trading Range Analysis
30-Day Trading Range
$38.88 -
$41.72
Current vs Trading Range
EXTENDED
Support & Resistance Levels
Support Level
$40.45
Resistance Level
$43.20
Current Trend
Downtrend
Technical data as of
Oct 2, 2026
Fundamental Context
Forward P/E (Next Year Est.)
9.13
Wall Street Target
$49.57
(+16.7%)
Revenue Growth (YoY)
16.4%
Earnings Growth (YoY)
20.5%
Profit Margin
2.8%
Valuation Discount vs History
-3.6% cheaper
PE vs Historical
9.1 vs 10.2
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-3.6%
(market-implied from PE analysis)
1-Year Target
$40.94
(-4%)
2-Year Target
$39.47
(-7%)
3-Year Target
$38.05
(-10%)
3-Yr Target (if PE normalizes)
(PE: 9→10)
$42.49
(0%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 20.4, Growth: 48.2%)
$309.00
(+628%)
Base:
(SPY PE: 9.1, Growth: 48.2%)
$138.36
(+226%)
Bear:
(PE: 7.8, Growth: 48.2%)
$117.60
(+177%)
📈
Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (26x PE), but valuation improves significantly next year (9x PE) as earnings recover.
Trailing PE: 26.15 | Current EPS (TTM): $1.60
Bull Case
$92.05
(+117%)
Analyst growth 100.0%, PE expands to 28.8
Base Case
$83.68
(+97%)
Market implied 100.0%, PE stable at 26.2
Bear Case
$28.45
(-33%)
Severe decline -20.0%, PE contracts to 22.2
These are projections based on PE multiples and EPS growth scenarios, not predictions. Actual results may vary significantly.
💡
Upside Surprise Potential
If earnings stabilize (0% growth), PE could expand from 9.1 to 10.2
Stabilization Target:
$47.42
(+11.7%)
PE Expansion Potential:
+11.7%
Share & Embed Analysis
Last updated: October 03, 2026 7:05 PM ET
Data refreshes hourly during market hours. Next update: 8:05 PM
Data refreshes hourly during market hours. Next update: 8:05 PM
🔥 Top Stocks Breaking Out Now
| Ticker | Score | Recommendation | Change % |
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Technical Signals Check
Is LUV showing a specific setup today?
Insider Activity (6 Months)
0
Buys
1
Sells
Net
INSIDERS SELLING
Recent Transactions
Lisa M Atherton
SELL
118 shares
2026-04-07
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