LUV Stock Analysis: Buy, Sell, or Hold?
LUV - Southwest Airlines Co.
$50.25
-0.22 (-0.44%)
▼
5d:
-3.53%
30d:
+18.68%
90d:
+31.44%
HOLD
MODERATE Confidence
Analysis Updated: Jul 2, 2026 12:00 AM ET
Earnings: Jul 22, 2026
17d
Smart Money Distribution
None View Scanner →
Strength: 8.7/10
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Interactive Price Chart (1 Month)
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Bottom Line:
📊 HOLD: LUV is fairly valued with market pricing in 1.0% annual growth. Fine to hold or accumulate slowly on dips.
📊 HOLD: LUV is fairly valued with market pricing in 1.0% annual growth. Fine to hold or accumulate slowly on dips.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$95.49
Based on 14.5% avg growth
INTRINSIC VALUE TODAY
$59.29
15.2% 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 10.7x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: LUV is currently trading at $50.25, which is considered extended relative to its 30-day fair value range of $42.10 to $49.84. The stock's valuation (Forward PE: 11.0) is in line with its historical norms (10.7). At these levels, the market is pricing in 1.0% annual earnings growth. This growth rate appears achievable given the company's track record, suggesting the valuation is rational.
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: LUV has a strong technical setup (75/100), with favorable trendlines, momentum, and price action for short-term traders. 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 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: LUV has a strong technical setup (75/100), with favorable trendlines, momentum, and price action for short-term traders. 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
Historical Trading Range
$42.10 -
$49.84
Company Quality Score
61/100
(BUY)
Volume Confirmation
HIGH
Confidence Score
58.1%
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
- BEARISH: Price extended above range
- BULLISH: Strong technical setup (75/100)
- BULLISH: High volume confirmation
- NEUTRAL: Near Wall St target ($47.99)
- NEUTRAL: Market pricing in 1.0% annual earnings growth - fairly valued
Trading Range Analysis
30-Day Trading Range
$42.10 -
$49.84
Current vs Trading Range
EXTENDED
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.)
10.97
Wall Street Target
$47.99
(-4.5%)
Revenue Growth (YoY)
12.8%
Earnings Growth (YoY)
50.8%
Profit Margin
2.8%
Valuation Premium vs History
+1.0% premium
PE vs Historical
11.0 vs 10.7
FAIR
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
+1.0%
(market-implied from PE analysis)
1-Year Target
$50.75
(+1%)
2-Year Target
$51.26
(+2%)
3-Year Target
$51.77
(+3%)
3-Yr Target (if PE normalizes)
(PE: 11→11)
PE COMPRESSION
$50.52
(+1%)
Earnings growth offset by PE compression
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 21.8, Growth: 60.6%)
$336.86
(+570%)
Base:
(SPY PE: 11.0, Growth: 60.6%)
$169.59
(+238%)
Bear:
(PE: 9.3, Growth: 60.6%)
$144.15
(+187%)
📈
Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (34x PE), but valuation improves significantly next year (11x PE) as earnings recover.
Trailing PE: 33.65 | Current EPS (TTM): $1.50
Bull Case
$111.03
(+121%)
Analyst growth 100.0%, PE expands to 37.0
Base Case
$100.94
(+101%)
Market implied 100.0%, PE stable at 33.7
Bear Case
$34.32
(-32%)
Severe decline -20.0%, PE contracts to 28.6
These are projections based on PE multiples and EPS growth scenarios, not predictions. Actual results may vary significantly.
Share & Embed Analysis
Last updated: July 04, 2026 5:21 PM ET
Data refreshes hourly during market hours. Next update: 6:21 PM
Data refreshes hourly during market hours. Next update: 6:21 PM
🔥 Top Stocks Breaking Out Now
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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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Advanced LUV Option Strategies
Professional options setups generated by AI based on today's LUV price and gamma walls.
