Southwest Airlines Co.

NYSE:LUV Stock Report

Market Cap: US$19.7b

Southwest Airlines Valuation

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

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales 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.

Below Fair Value: LUV ($33.28) is trading below our estimate of fair value ($188.95)

Significantly Below Fair Value: LUV is trading below fair value by more than 20%.

Key Valuation Metric

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

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

The above table shows the Price to Sales ratio for LUV. This is calculated by dividing LUV's market cap by their current revenue.
What is LUV's PS Ratio?
PS Ratio0.7x
SalesUS$27.38b
Market CapUS$19.66b

Price to Sales Ratio vs Peers

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

The above table shows the PS ratio for LUV vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average0.6x
AAL American Airlines Group
0.2x4.3%US$10.9b
UAL United Airlines Holdings
0.6x5.2%US$31.4b
DAL Delta Air Lines
0.6x2.4%US$38.7b
ALK Alaska Air Group
0.8x13.9%US$8.2b
LUV Southwest Airlines
0.7x4.5%US$19.7b

Price-To-Sales vs Peers: LUV is expensive based on its Price-To-Sales Ratio (0.7x) compared to the peer average (0.6x).

Price to Sales Ratio vs Industry

How does LUV's PS Ratio compare vs other companies in the US Airlines Industry?

7 CompaniesPrice / SalesEstimated GrowthMarket Cap
MESA Mesa Air Group
0.1xn/aUS$46.68m
SAVE.Q Spirit Airlines
0.01x0.3%US$44.93m
NOKP.F Nok Airlines
0.1xn/aUS$22.38m
TAWN.F Thai Airways International
0.004xn/aUS$21.83m
LUV 0.7xIndustry Avg. 0.6xNo. of Companies7PS00.40.81.21.62+
7 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: LUV is expensive based on its Price-To-Sales Ratio (0.7x) compared to the North American Airlines industry average (0.6x).

Price to Sales Ratio vs Fair Ratio

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

LUV PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio0.7x
Fair PS Ratio1.3x

Price-To-Sales vs Fair Ratio: LUV is good value based on its Price-To-Sales Ratio (0.7x) compared to the estimated Fair Price-To-Sales Ratio (1.3x).

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
CurrentUS$33.28
US$31.64
-4.9%
16.1%US$42.00US$23.12n/a21
Dec ’25US$32.36
US$29.62
-8.5%
15.9%US$39.00US$19.00n/a20
Nov ’25US$30.61
US$29.67
-3.1%
16.8%US$39.00US$19.00n/a17
Oct ’25US$29.88
US$26.42
-11.6%
19.2%US$35.00US$19.00n/a17
Sep ’25US$28.92
US$25.32
-12.5%
17.1%US$33.00US$19.00n/a16
Aug ’25US$26.36
US$25.44
-3.5%
17.0%US$33.00US$19.00n/a16
Jul ’25US$28.11
US$26.36
-6.2%
16.8%US$37.00US$19.00n/a16
Jun ’25US$26.84
US$26.96
+0.5%
18.6%US$38.00US$19.00n/a18
May ’25US$25.67
US$27.07
+5.4%
18.5%US$38.00US$19.00n/a18
Apr ’25US$29.18
US$29.88
+2.4%
19.5%US$42.00US$19.00n/a19
Mar ’25US$33.96
US$29.56
-12.9%
21.8%US$42.00US$19.00n/a19
Feb ’25US$30.18
US$28.01
-7.2%
23.1%US$40.00US$15.00n/a19
Jan ’25US$28.88
US$26.53
-8.1%
26.6%US$47.00US$18.00n/a19
Dec ’24US$26.69
US$26.48
-0.8%
26.6%US$47.00US$18.00US$32.3619
Nov ’24US$22.23
US$28.16
+26.7%
25.2%US$47.00US$18.00US$30.6119
Oct ’24US$27.07
US$34.04
+25.7%
21.6%US$55.00US$20.00US$29.8819
Sep ’24US$31.42
US$36.26
+15.4%
18.9%US$55.00US$25.00US$28.9219
Aug ’24US$33.43
US$38.23
+14.4%
15.2%US$55.00US$30.00US$26.3618
Jul ’24US$36.21
US$40.95
+13.1%
17.4%US$60.00US$32.00US$28.1118
Jun ’24US$29.11
US$40.45
+39.0%
18.2%US$63.00US$32.00US$26.8418
May ’24US$30.59
US$42.57
+39.2%
22.3%US$64.00US$32.00US$25.6718
Apr ’24US$32.54
US$44.79
+37.6%
20.3%US$64.00US$32.00US$29.1818
Mar ’24US$33.65
US$45.72
+35.9%
17.8%US$64.00US$35.00US$33.9618
Feb ’24US$35.63
US$45.94
+28.9%
17.4%US$64.00US$35.00US$30.1818
Jan ’24US$33.67
US$49.44
+46.9%
17.0%US$68.00US$39.00US$28.8818
Dec ’23US$40.08
US$49.94
+24.6%
16.9%US$66.00US$39.00US$26.6917

Analyst Forecast: Target price is lower than the current share price.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/20 22:42
End of Day Share Price 2024/12/20 00:00
Earnings2024/09/30
Annual Earnings2023/12/31

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 here.

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 .

Analyst Sources

Southwest Airlines Co. is covered by 45 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