LUV Stock Analysis: Buy, Sell, or Hold?
LUV - Southwest Airlines Co.
$39.62
0.89 (2.30%)
▲
5d:
-0.05%
30d:
-15.59%
90d:
-4.62%
HOLD
LOW Confidence
Analysis Updated: Sep 4, 2026 12:00 AM ET
Earnings: Oct 28, 2026
Smart Money Distribution
Options positioning is turning defensive after a sharp run-up - a pattern consistent with institutional profit-taking. View Scanner →
Signal fired Sep 4, 2026 at $39.59 · last confirmed Sep 4, 2026
Strength: 5.6/10
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Interactive Price Chart (1 Month)
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Bottom Line:
📊 HOLD: LUV shows mixed signals. Fine to hold existing positions. Not urgent to buy or sell.
📊 HOLD: LUV shows mixed signals. Fine to hold existing positions. Not urgent to buy or sell.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$98.14
Based on 14.5% avg growth
INTRINSIC VALUE TODAY
$60.94
35.0% 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 10.4x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: LUV is currently trading at $39.62, which is considered oversold relative to its 30-day fair value range of $39.82 to $46.31. From a valuation perspective, the stock is trading at a discount (Forward PE: 8.2) compared to its historical average (10.4). Remarkably, the market is currently pricing in an annual earnings decline of 7.6% 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 uptrend. Immediate support is located at $37.58, while resistance sits at $41.84.
Market Sentiment: LUV scores 96/100 on our bottoming-setup gauge — the chart has corrected and is stabilizing (RSI reset, momentum turning up), historically a favorable entry zone. Wall Street analysts see significant upside, with an average price target of $51.09 (+29.0%). The stock is fairly positioned - fine to hold existing positions or accumulate slowly on dips, but not an urgent buy.
Technical Outlook: Technically, LUV is in a uptrend. Immediate support is located at $37.58, while resistance sits at $41.84.
Market Sentiment: LUV scores 96/100 on our bottoming-setup gauge — the chart has corrected and is stabilizing (RSI reset, momentum turning up), historically a favorable entry zone. Wall Street analysts see significant upside, with an average price target of $51.09 (+29.0%). The stock is fairly positioned - fine to hold existing positions or accumulate slowly on dips, but not an urgent buy.
Quick Decision Summary
Current Position
OVERSOLD
Historical Trading Range
$39.82 -
$46.31
Company Quality Score
59/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
90.5%
Protect Your Profits
Holding LUV? Use our AI-powered strategies to protect your downside while keeping your long-term position.
View Profit Protection PlanAll Signals
- BULLISH: Price oversold vs 30-day range
- BULLISH: Strong technical setup (96/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 29.0% below Wall St target ($51.09)
- CAUTION: Bottoming setup, but lagging the sector by 13% over 20 days — wait for relative strength
Trading Range Analysis
30-Day Trading Range
$39.82 -
$46.31
Current vs Trading Range
OVERSOLD
Support & Resistance Levels
Support Level
$37.58
Resistance Level
$41.84
Current Trend
Uptrend
Technical data as of
Sep 4, 2026
Fundamental Context
Forward P/E (Next Year Est.)
8.18
Wall Street Target
$51.09
(+29.0%)
Revenue Growth (YoY)
16.4%
Earnings Growth (YoY)
20.5%
Profit Margin
2.8%
Valuation Discount vs History
-7.6% cheaper
PE vs Historical
8.2 vs 10.4
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-7.6%
(market-implied from PE analysis)
1-Year Target
$36.61
(-8%)
2-Year Target
$33.83
(-15%)
3-Year Target
$31.26
(-21%)
3-Yr Target (if PE normalizes)
(PE: 8→10)
$39.76
(+0%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 20.2, Growth: 44.0%)
$292.96
(+639%)
Base:
(SPY PE: 8.2, Growth: 44.0%)
$118.40
(+199%)
Bear:
(PE: 6.9, Growth: 44.0%)
$100.64
(+154%)
📈
Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (24x PE), but valuation improves significantly next year (8x PE) as earnings recover.
Trailing PE: 24.21 | Current EPS (TTM): $1.60
Bull Case
$85.21
(+115%)
Analyst growth 100.0%, PE expands to 26.6
Base Case
$77.46
(+96%)
Market implied 100.0%, PE stable at 24.2
Bear Case
$26.34
(-34%)
Severe decline -20.0%, PE contracts to 20.6
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 8.2 to 10.4
Stabilization Target:
$50.40
(+27.2%)
PE Expansion Potential:
+27.2%
Share & Embed Analysis
Last updated: September 05, 2026 6:58 AM ET
Data refreshes hourly during market hours. Next update: 7:58 AM
Data refreshes hourly during market hours. Next update: 7:58 AM
🔥 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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Advanced LUV Option Strategies
Professional options setups generated by AI based on today's LUV price and gamma walls.
