LUV Stock Analysis: Buy, Sell, or Hold?
LUV - Southwest Airlines Co.
$36.29
-1.07 (-2.86%)
▼
5d:
-10.06%
30d:
-26.33%
90d:
-12.09%
HOLD
MODERATE Confidence
Analysis Updated: Mar 30, 2026 12:00 AM ET
Earnings: Apr 22, 2026
22d
Smart Money Accumulation
LUV is down 9.2% this week, but smart money is accumulating calls. Top strike: $50 2026-06-18 with 22,360 OI. Call ratio: 76% View Scanner →
Strength: 7.2/10
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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
$101.53
Based on 12.5% avg growth
INTRINSIC VALUE TODAY
$63.04
42.4% 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 11.8x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: LUV is currently trading at $36.29, which is considered oversold relative to its 30-day fair value range of $38.83 to $48.67. From a valuation perspective, the stock is trading at a discount (Forward PE: 7.5) compared to its historical average (11.8). Remarkably, the market is currently pricing in an annual earnings decline of 14.0% 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 uptrend. The price is currently testing key support at $36.15. A bounce from this level would confirm strength, while a break below could signal further downside.
Market Sentiment: LUV has a weak technical setup (25/100), with bearish trendlines and momentum suggesting caution for short-term entries. Wall Street analysts see significant upside, with an average price target of $47.30 (+30.3%). 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. The price is currently testing key support at $36.15. A bounce from this level would confirm strength, while a break below could signal further downside.
Market Sentiment: LUV has a weak technical setup (25/100), with bearish trendlines and momentum suggesting caution for short-term entries. Wall Street analysts see significant upside, with an average price target of $47.30 (+30.3%). 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
Fair Price Range
$38.83 -
$48.67
Company Quality Score
47/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
57.1%
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
- BEARISH: Weak technical setup (25/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 30.3% below Wall St target ($47.30)
- CAUTION: 5-day price weakness (-10.1%) - monitor closely
Fair Price Analysis
30-Day Fair Range
$38.83 -
$48.67
Current vs Fair Value
OVERSOLD
Support & Resistance Levels
Support Level
$36.15
Resistance Level
$41.83
Current Trend
Uptrend
Technical data as of
Mar 30, 2026
Fundamental Context
Forward P/E (Next Year Est.)
7.53
Wall Street Target
$47.30
(+30.3%)
Revenue Growth (YoY)
7.4%
Earnings Growth (YoY)
50.8%
Profit Margin
1.6%
Valuation Discount vs History
-14.0% cheaper
PE vs Historical
7.5 vs 11.8
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-14.0%
(market-implied from PE analysis)
1-Year Target
$32.66
(-10%)
2-Year Target
$29.39
(-19%)
3-Year Target
$26.46
(-27%)
3-Yr Target (if PE normalizes)
(PE: 8→12)
$41.46
(+14%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 22.4, Growth: 20.9%)
$190.36
(+425%)
Base:
(SPY PE: 7.5, Growth: 20.9%)
$64.13
(+77%)
Bear:
(PE: 6.4, Growth: 20.9%)
$54.51
(+50%)
📈
Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (50x PE), but valuation improves significantly next year (8x PE) as earnings recover.
Trailing PE: 49.89 | Current EPS (TTM): $0.79
Bull Case
$86.70
(+115%)
Analyst growth 100.0%, PE expands to 54.9
Base Case
$78.82
(+95%)
Market implied 100.0%, PE stable at 49.9
Bear Case
$26.80
(-34%)
Severe decline -20.0%, PE contracts to 42.4
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 7.5 to 11.8
Stabilization Target:
$56.87
(+56.7%)
PE Expansion Potential:
+56.7%
Share & Embed Analysis
Last updated: March 30, 2026 5:42 PM ET
Data refreshes hourly during market hours. Next update: 6:42 PM
Data refreshes hourly during market hours. Next update: 6:42 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
Ro Khanna
SELL
2026-02-06
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Advanced LUV Option Strategies
Professional options setups generated by AI based on today's LUV price and gamma walls.
