LUV Stock Analysis: Buy, Sell, or Hold?
LUV - Southwest Airlines Co.
$47.52
-0.98 (-2.02%)
▼
HOLD
MODERATE Confidence
Last Updated: January 30, 2026
Earnings: Apr 23, 2026
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4 traders called LUV this week
50% bullish • 2 bearish
50% bullish • 2 bearish
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
$86.62
Based on 14.5% avg growth
INTRINSIC VALUE TODAY
$53.78
11.6% 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 13.8x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: LUV is currently trading at $47.52, which is considered extended relative to its 30-day fair value range of $40.93 to $44.42. The stock's valuation (Forward PE: 15.1) is in line with its historical norms (13.8). At these levels, the market is pricing in 3.0% annual earnings growth.
Technical Outlook: Technically, LUV is in a strong uptrend. Immediate support is located at $40.68, while resistance sits at $49.12.
Market Sentiment: LUV has a strong technical setup (60/100), with favorable trendlines, momentum, and price action for short-term traders. However, the stock is trading significantly above the average Wall Street target of $41.93. 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 strong uptrend. Immediate support is located at $40.68, while resistance sits at $49.12.
Market Sentiment: LUV has a strong technical setup (60/100), with favorable trendlines, momentum, and price action for short-term traders. However, the stock is trading significantly above the average Wall Street target of $41.93. 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
EXTENDED
Fair Price Range
$40.93 -
$44.42
Company Quality Score
59/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
51.0%
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
- BEARISH: Price extended above range (+7.0% above fair value)
- BULLISH: Strong technical setup (60/100)
- BULLISH: High volume confirmation
- BEARISH: Trading 13.5% above Wall St target ($41.93)
- BULLISH: Expecting earnings turnaround to 3.0% growth with 1.2% revenue growth
Fair Price Analysis
30-Day Fair Range
$40.93 -
$44.42
Current vs Fair Value
EXTENDED
Support & Resistance Levels
Support Level
$40.68
Resistance Level
$49.12
Current Trend
Strong Uptrend
Fundamental Context
Forward P/E (Next Year Est.)
15.05
Wall Street Target
$41.93
(-13.5%)
Revenue Growth (YoY)
1.2%
Earnings Growth (YoY)
-9.1%
Profit Margin
1.4%
Valuation Premium vs History
+3.0% premium
PE vs Historical
15.1 vs 13.8
FAIR
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
+3.0%
(market-implied from PE analysis)
1-Year Target
$49.96
(+3%)
2-Year Target
$51.45
(+6%)
3-Year Target
$53.00
(+9%)
3-Yr Target (if PE normalizes)
(PE: 15→14)
PE COMPRESSION
$48.60
(+0%)
Earnings growth offset by PE compression
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 22.3, Growth: 238.5%)
$242.59
(+400%)
Base:
(SPY PE: 15.0, Growth: 238.5%)
$163.69
(+238%)
Bear:
(PE: 12.8, Growth: 238.5%)
$139.13
(+187%)
📈
Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (15x PE), but valuation improves significantly next year (15x PE) as earnings recover.
Forward PE: 15.15 | Forward EPS (Implied): $3.14
Bull Case
$57.38
(+21%)
Analyst growth 15.0%, PE expands to 15.9
Base Case
$47.52
(0%)
Market implied 0.0%, PE stable at 15.2
Bear Case
$36.35
(-24%)
Severe decline -15.0%, PE contracts to 13.6
These are projections based on PE multiples and EPS growth scenarios, not predictions. Actual results may vary significantly.
Last updated: January 31, 2026 8:43 AM ET
Data refreshes hourly during market hours. Next update: 9:43 AM
Data refreshes hourly during market hours. Next update: 9:43 AM
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Technical Signals Check
Is LUV showing a specific setup today?
Insider Activity (6 Months)
3
Buys
1
Sells
+
Net
INSIDERS BUYING
Recent Transactions
Gilbert Ray Cisneros, Jr.
BUY
2025-09-05
Gregg A Saretsky
BUY
3345 shares
2025-08-06
Sarah Feinberg
BUY
1500 shares
2025-08-05
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Advanced LUV Option Strategies
Professional options setups generated by AI based on today's LUV price and gamma walls.
