LUV Stock Analysis: Buy, Sell, or Hold?
LUV - Southwest Airlines Co.
$47.60
-0.33 (-0.68%)
▼
5d:
-3.71%
30d:
+7.46%
90d:
+20.65%
BUY
MODERATE Confidence
Analysis Updated: Jul 14, 2026 12:00 AM ET
Earnings: Jul 22, 2026
7d
Smart Money Accumulation
None View Scanner →
Strength: 7.7/10
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Interactive Price Chart (1 Month)
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Bottom Line:
💡 BUY OPPORTUNITY: LUV shows positive signals but monitor for confirmation. Market pricing in 2.3% decline. Moderate conviction.
💡 BUY OPPORTUNITY: LUV shows positive signals but monitor for confirmation. Market pricing in 2.3% decline. Moderate conviction.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$99.75
Based on 14.5% avg growth
INTRINSIC VALUE TODAY
$61.94
23.2% 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 10.6x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: LUV is currently trading at $47.59, which is considered fair relative to its 30-day fair value range of $44.60 to $51.09. The stock's valuation (Forward PE: 9.9) is in line with its historical norms (10.6). Remarkably, the market is currently pricing in an annual earnings decline of 2.3% over the next few years. This pessimistic expectation contrasts with the company's recent 50.8% 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 $44.44. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: The stock shows a mixed technical setup (40/100), with neutral trendline and momentum signals. Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Technical Outlook: Technically, LUV is in a downtrend. The price is approaching resistance at $44.44. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: The stock shows a mixed technical setup (40/100), with neutral trendline and momentum signals. Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Quick Decision Summary
Current Position
FAIR
Historical Trading Range
$44.60 -
$51.09
Company Quality Score
56/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
67.6%
All Signals
- NEUTRAL: Price in fair range
- NEUTRAL: Mixed technical signals (40/100)
- BULLISH: High volume confirmation
- NEUTRAL: Near Wall St target ($52.36)
Trading Range Analysis
30-Day Trading Range
$44.60 -
$51.09
Current vs Trading Range
FAIR
Support & Resistance Levels
Support Level
$40.82
Resistance Level
$44.44
Current Trend
Downtrend
Technical data as of
Jun 9, 2026
Fundamental Context
Forward P/E (Next Year Est.)
9.92
Wall Street Target
$52.36
(+9.3%)
Revenue Growth (YoY)
12.8%
Earnings Growth (YoY)
50.8%
Profit Margin
2.8%
Valuation Discount vs History
-2.3% cheaper
PE vs Historical
9.9 vs 10.6
FAIR
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-2.3%
(market-implied from PE analysis)
1-Year Target
$46.82
(-2%)
2-Year Target
$45.74
(-5%)
3-Year Target
$44.69
(-7%)
3-Yr Target (if PE normalizes)
(PE: 10→11)
$47.77
(0%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 21.8, Growth: 57.1%)
$355.22
(+641%)
Base:
(SPY PE: 9.9, Growth: 57.1%)
$161.73
(+238%)
Bear:
(PE: 8.4, Growth: 57.1%)
$137.47
(+187%)
📈
Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (32x PE), but valuation improves significantly next year (10x PE) as earnings recover.
Trailing PE: 32.29 | Current EPS (TTM): $1.50
Bull Case
$106.55
(+122%)
Analyst growth 100.0%, PE expands to 35.5
Base Case
$96.86
(+102%)
Market implied 100.0%, PE stable at 32.3
Bear Case
$32.93
(-31%)
Severe decline -20.0%, PE contracts to 27.4
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 9.9 to 10.6
Stabilization Target:
$51.22
(+6.9%)
PE Expansion Potential:
+6.9%
Share & Embed Analysis
Last updated: July 14, 2026 1:50 PM ET
Data refreshes hourly during market hours. Next update: 2:50 PM
Data refreshes hourly during market hours. Next update: 2:50 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
2
Sells
Net
INSIDERS SELLING
Recent Transactions
Lisa M Atherton
SELL
118 shares
2026-04-07
Ro Khanna
SELL
2026-02-06
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Professional options setups generated by AI based on today's LUV price and gamma walls.
