Southwest Airlines Co.

WBAG:LUV Stock Report

Market Cap: €17.2b

Southwest Airlines Valuation

Is LUV undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of LUV when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Discounted Cash Flow
Simply Wall St
€18.28
Fair Value
58.0% overvalued intrinsic discount
21
Number of Analysts

Below Fair Value: LUV (€28.89) is trading above our estimate of fair value (€18.28)

Significantly Below Fair Value: LUV is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LUV?

Key metric: As LUV is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for LUV. This is calculated by dividing LUV's market cap by their current earnings.
What is LUV's PE Ratio?
PE Ratio38.6x
EarningsUS$465.00m
Market CapUS$17.95b

Price to Earnings Ratio vs Peers

How does LUV's PE Ratio compare to its peers?

The above table shows the PE ratio for LUV vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average19.1x
FLU Flughafen Wien
22.6x3.8%€4.5b
INDIGO InterGlobe Aviation
27.9x21.6%₹1.7t
AAL American Airlines Group
12.5x22.8%US$10.5b
RYA Ryanair Holdings
13.2x9.9%€22.0b
LUV Southwest Airlines
38.6x25.5%€17.9b

Price-To-Earnings vs Peers: LUV is expensive based on its Price-To-Earnings Ratio (38.6x) compared to the peer average (19x).

Price to Earnings Ratio vs Industry

How does LUV's PE Ratio compare vs other companies in the Global Airlines Industry?

5 CompaniesPrice / EarningsEstimated GrowthMarket Cap
LUV 38.6xIndustry Avg. 10.5xNo. of Companies6PE0612182430+
5 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: LUV is expensive based on its Price-To-Earnings Ratio (38.6x) compared to the Global Airlines industry average (10.7x).

Price to Earnings Ratio vs Fair Ratio

What is LUV's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LUV PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio38.6x
Fair PE Ratio32.9x

Price-To-Earnings vs Fair Ratio: LUV is expensive based on its Price-To-Earnings Ratio (38.6x) compared to the estimated Fair Price-To-Earnings Ratio (32.9x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst LUV forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€28.89
€30.61
+6.0%
16.0%€40.17€22.96n/a21
Feb ’26€29.56
€31.76
+7.5%
15.0%€40.52€23.15n/a20
Jan ’26€32.42
€30.60
-5.6%
16.7%€40.38€22.23n/a21
Dec ’25€30.79
€28.27
-8.2%
15.9%€37.23€18.14n/a20
Nov ’25€28.46
€27.28
-4.1%
16.8%€35.86€17.47n/a17
Oct ’25€26.96
€23.73
-12.0%
19.2%€31.43€17.06n/a17
Sep ’25€26.25
€23.10
-12.0%
17.1%€30.12€17.34n/a16
Aug ’25€24.59
€23.50
-4.4%
17.0%€30.49€17.55n/a16
Jul ’25€26.25
€24.62
-6.2%
16.8%€34.56€17.75n/a16
Jun ’25€24.18
€25.03
+3.5%
18.6%€35.27€17.64n/a18
May ’25€24.55
€25.25
+2.8%
18.5%€35.44€17.72n/a18
Apr ’25€27.21
€27.44
+0.9%
19.5%€38.58€17.45n/a19
Mar ’25€31.34
€27.35
-12.7%
21.8%€38.85€17.58n/a19
Feb ’25€27.32
€25.83
-5.5%
23.1%€36.89€13.83€29.5619
Jan ’25€26.60
€24.30
-8.6%
26.6%€43.05€16.49€32.4219
Dec ’24€24.11
€24.19
+0.4%
26.6%€42.94€16.45€30.7919
Nov ’24€20.97
€26.65
+27.1%
25.2%€44.48€17.03€28.4619
Oct ’24€25.89
€32.20
+24.4%
21.6%€52.02€18.92€26.9619
Sep ’24€29.07
€33.31
+14.6%
18.9%€50.52€22.96€26.2519
Aug ’24€30.45
€34.77
+14.2%
15.2%€50.02€27.28€24.5918
Jul ’24€33.00
€37.55
+13.8%
17.4%€55.02€29.34€26.2518
Jun ’24€27.29
€37.59
+37.8%
18.2%€58.55€29.74€24.1818
May ’24€26.67
€38.63
+44.9%
22.3%€58.08€29.04€24.5518
Apr ’24€29.73
€41.32
+39.0%
20.3%€59.04€29.52€27.2118
Mar ’24€31.48
€42.79
+35.9%
17.8%€59.89€32.75€31.3418
Feb ’24€32.36
€42.36
+30.9%
17.4%€59.00€32.27€27.3218
Analyst Price Target
Consensus Narrative from 21 Analysts
€30.53
Fair Value
5.4% undervalued intrinsic discount
21
Number of Analysts

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2025/02/18 16:13
End of Day Share Price 2025/02/18 00:00
Earnings2024/12/31
Annual Earnings2024/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Southwest Airlines Co. is covered by 42 analysts. 21 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
John StaszakArgus Research Company
Lindsay BettiolAtlantic Equities LLP
Fred LowranceAvondale Partners