Southwest Airlines Co (LUV)

Industrials · Passenger Airlines · US stock · S&P 500 component

$42.03 ▲ +2.15 (5.39%)

At close 22 Oct 2026 · USD · Volume 12,246,040

Compare with DAL

Interactive chart Research report Forecast ranges Pro workspace SEC filings Historical data

Fair valueFair

$44 +3.8% to fair value

$22fair band $37–$53$65

Day's range

$38.65 – $42.08

52-week range

$29.26 – $55.11

About Southwest Airlines Co

Southwest Airlines is a Dallas-based passenger airline that flies mainly short- and medium-haul routes across the United States and to nearby destinations in Mexico, the Caribbean and Central America. It operates a point-to-point route network rather than a hub-and-spoke one. Customers are leisure and business travellers who book through the airline's website, app and reservation centres, and it also earns income from cargo and a loyalty programme.

Revenue comes mainly from passenger fares, supplemented by cargo, loyalty programme and other income. It totals $30.1 billion over the last twelve months, growing at 5.6% a year across the last three years. The operating margin is 3.5%, and the business earns a profit of 9% on the capital invested in it. The airline carries net debt of 0.8 times EBITDA, and the dividend yield is 1.7%. On the site's X-Ray Score it receives 39 out of 100.

Price chart

Interactive chart Historical data & CSV

52-wk range $29.26 – $55.11Volume 12,246,040Daily, split-adjusted

Vitals

Market cap$20.7B

52-week range$29.26 – $55.11

Volume (last day)12,246,040

P/E (TTM)26.1

EBIT / EV yield4.6%

Free-cash-flow yield-2.2%

Dividend yield1.7%

Revenue (TTM)$30.1B

Net income (TTM)$837M

Operating margin3.5%

Return on capital8.8%

Debt incl. leases$5.9B

Cash & securities$3.8B

Debt = borrowings plus lease liabilities. Cash & securities = cash, equivalents and short-term marketable securities (long-term securities are not counted, so net cash can be understated for companies that hold large long-term investments). Net debt = debt minus cash & securities. Source: latest SEC 10-Q/10-K. EBIT / EV yield = operating profit divided by market cap plus net debt.

Fair value estimate

$44middle half of models $34 – $55

Fair +3.8% to fair value

Average of the 14 valuation models that pass our checks: multiples, discounted cash flow, dividend discount and earnings power value. A model more than 100% above or 60% below the price is left out as unrealistic. Model uncertainty is High, based on how far apart the models are. Undervalued or Overvalued means the gap to fair value is more than 17.5%.

Price $42

Undervalued < $37Fair $37 – $53Overvalued > $53

P/E multiple

$46

P/B multiple

$37

P/S multiple

$78

EV/EBITDA multiple

$48

EV/EBIT multiple

$57

EV/revenue multiple

$65

10-year DCF, EBITDA exit

$24

5-year DCF, EBITDA exit

$35

10-year DCF, revenue exit

$25

5-year DCF, revenue exit

$36

10-year DCF, growth exit · not used

$11

5-year DCF, growth exit

$19

Dividend discount, stable

$36

Dividend discount, multi-stage

$71

Earnings power value

$34

Growth the price implies

14.9%/yr

A model estimate, not a price target or recommendation. Inputs: risk-free 5.13%, equity risk premium 4.30% (Damodaran). How it works.

What this means

Weak business, fairly priced

The price sits inside our fair-value band. A high score does not guarantee a good outcome; it shifts the odds a little. Use the checklist as a prompt for your own research.

Before you invest · decision checklist

I understand how this company makes money Business quality is average or better 37 The price is not above fair value $44 fair value Debt looks manageable 0.8× EBITDA Revenue has been growing 5.6% a year Profits are backed by cash There are no red flags none raised I know what share of my savings this would be

Ticked boxes are filled in from our data; the rest are yours to answer.

The five-lens scan

Every score explained in one sentence, ranked against Industrials peers. Open a lens to see the numbers behind it.

Strong: 70 to 100Fair: 50 to 69Weak: under 50No score: not enough data

Valuation Weak

44/100

Expensive against its sector on earnings and cash flow.

See the numbers →

EBIT / EV yield4.6%

Free-cash-flow yield-2.2%

Fair value vs price1.0×

Growth Weak

40/100

Growing slower than most of its sector.

See the numbers →

Revenue growth (3y)5.6%

EPS growth (3y)-3.2%

Growth consistency90%

Profitability Weak

28/100

Earns lower returns on its capital than most peers.

See the numbers →

Return on invested capital8.8%

Operating margin3.5%

Financial health Weak

45/100

Balance sheet is more stretched than most peers.

See the numbers →

Piotroski F-Score8 / 9

Net debt / EBITDA0.8×

Interest cover5.2×

Dividends Weak

36/100

Dividend is modest or less certain than peers.

See the numbers →

Dividend yield1.7%

Quarterly results: last 6 quarters

+1.6%

Mar '25

-1.5%

Jun '25

+1.1%

Sep '25

+7.4%

Dec '25

+12.8%

Mar '26

+16.4%

Jun '26

Revenue against the same quarter a year earlier. Latest quarter revenue $8.4B, diluted EPS $0.47.

Compare with peers

UAL United Airlines Holdin...63 DAL Delta Air Lines, Inc.60

Other Passenger Airlines companies by X-Ray Score.

SWOT analysis: Southwest Airlines Co

Strengthsinside the company

Passes 8 of the 9 Piotroski tests, which points to improving profitability, funding and efficiency.

Weaknessesinside the company

Return on invested capital of 8.8% is well below the 15.0% median of sector peers.
Operating margin of 3.5% is thin against 17.5% for sector peers.
Free cash flow is negative, so spending or debt has to be financed from outside.
Altman Z-score of 0.9 is in the zone linked with financial distress in past studies.

Opportunitiesvaluation and setting

No specific opportunity is visible in our valuation, sector or growth data.

Threatsvaluation and setting

Valuation uncertainty is high: the models give widely different values, so the fair value range is wide.
Earnings in Passenger Airlines follow the industry cycle, so margins and profits can swing from year to year.

Written by fixed rules from the figures on this page and the peer table below: filings, our fair value, the sector climate and the price trend. It summarises the data, it is not a forecast or advice.

Compare LUV with peers and sector

Medians of 80 Industrials peers and of 80 Industrials stocks in our universe. Largest peers (X-Ray Score): CAT 43, GE 49, RTX 51, GEV 50, UNP 45, DE 43.

Metric	LUV	Peers	Sector
X-Ray Score (out of 100)	39	51	51
Valuation	44	48	48
Growth	40	51	51
Profitability	28	51	51
Financial health	45	49	49
Dividends	36	53	53

Sector leaders: highest X-Ray Score in Industrials

LUV ranks #69 of 81 in Industrials by X-Ray Score. A higher score is stronger on our five pillars; it is a ranking of facts, not a forecast.

Company	X-Ray Score
#1 GD General Dynamics Corp	70
#2 EME EMCOR Group, Inc.	69
#3 PAYX Paychex Inc	69
#4 LDOS Leidos Holdings, Inc.	67
#5 SNA Snap-on Inc	66
…
#69 LUV Southwest Airlines Co (this stock)	39

Metric	LUV	Peers	Sector
P/E ratio	24.8x	29.3x	29.3x
PEG ratio	–	2.36	2.36
Price / book	2.9x	6.3x	6.3x
Price / sales	0.7x	3.6x	3.6x
EV / EBITDA	8.8x	18.6x	18.6x
Price / free cash flow	–	25.5x	25.5x
Dividend yield	1.7%	1.3%	1.3%
Gap to our fair value	+3.8%	−8.9%	−8.9%

Metric	LUV	Peers	Sector
Price change, 1 month	−0.1%	+2.5%	+2.5%
Price change, 3 months	−11.4%	−2.3%	−2.3%
Price change, 6 months	+7.8%	−1.4%	−1.4%
Price change, 1 year	+26.7%	+11.3%	+11.3%

Metric	LUV	Peers	Sector
Market value	$20.7B	$47.6B	$47.6B
Revenue (last 12 months)	$30.1B	$14.7B	$14.7B
EBITDA (last 12 months)	$2.6B	$2.5B	$2.5B
Net income (last 12 months)	$837M	$1.5B	$1.5B
Free cash flow (last 12 months)	−$455M	$1.7B	$1.7B

Metric	LUV	Peers	Sector
Revenue growth, last year	+2.1%	+4.5%	+4.5%
Revenue growth, 3 years a year	+5.6%	+5.6%	+5.6%
EPS growth, 3 years a year	−3.2%	+5.7%	+5.7%
Free cash flow growth, 3 years a year	–	+14.5%	+14.5%
Dividend growth	–	+6.8%	+6.8%

Metric	LUV	Peers	Sector
Gross margin	–	38.0%	38.0%
EBITDA margin	8.7%	20.4%	20.4%
Operating margin	3.5%	17.5%	17.5%
Net margin	2.8%	12.8%	12.8%
Return on invested capital	8.8%	15.0%	15.0%
Return on equity	11.8%	23.8%	23.8%

Metric	LUV	Peers	Sector
Net debt / EBITDA	0.8x	1.8x	1.8x
Interest cover	5.2x	21.8x	21.8x
Current ratio	0.5x	1.3x	1.3x
Piotroski F-score (0 to 9)	8	6	6

Green means better than the peer median, red worse (only where a higher or lower figure is clearly better). A dash means too few companies report the figure. P/E, EV/EBITDA and price changes are not graded: a different level is not good or bad by itself.

Factor ratings for LUV

Each factor is rated by where LUV stands among the 81 Industrials stocks in our universe.

Rating against the sector

Goodthe top third of these stocks

Averagethe middle third of these stocks

Badthe bottom third of these stocks

"Beats" is the share of those stocks it is ahead of.

Against its own history

The last columns set today's figure against the company's own median of its last five financial years:

▲ Betterbetter than its usual level

▼ Worseworse than its usual level

≈ In linewithin its usual range

For valuation factors Good means cheaper than most of the sector and Better means cheaper than usual for this company, which is not the same as a bargain.

In total: 8 Good · 2 Average · 10 Bad of 20 Growth: 0 · 1 · 2 Profitability: 0 · 0 · 4 Financial strength: 2 · 0 · 2 Valuation: 3 · 1 · 1 Cash flow: 2 · 0 · 1 Efficiency: 1 · 0 · 0

Factor	LUV	Rating	Sector median	Own 5-year median	Against own history
Growth
Revenue growth, 3 years a year	+5.6%	Average beats 51%	+5.6%	–	–
Revenue growth, last year	+2.1%	Bad beats 32%	+4.5%	+9.6%	▼ Worse
EPS growth, 3 years a year	−3.2%	Bad beats 24%	+5.7%	–	–
Profitability
Operating margin	3.5%	Bad beats 2%	17.5%	1.5%	▲ Better
Net margin	2.8%	Bad beats 7%	12.8%	1.8%	▲ Better
Return on invested capital	8.8%	Bad beats 18%	14.9%	–	–
Return on equity	11.8%	Bad beats 20%	23.7%	5.0%	▲ Better
Financial strength
Net debt / EBITDA	0.8x	Good beats 78%	1.8x	-1.6x	▼ Worse
Interest cover	5.2x	Bad beats 11%	21.4x	1.9x	▲ Better
Current ratio	0.49	Bad beats 2%	1.25	1.14	▼ Worse
Piotroski F-score	8 / 9	Good beats 86%	6 / 9	–	–
Valuation
P/E ratio	24.8x	Average beats 65%	28.9x	40.1x	▲ Better
Price / book	2.9x	Good beats 84%	6.2x	2.1x	▼ Worse
Price / sales	0.7x	Good beats 98%	3.5x	0.8x	≈ In line
EV / EBITDA	8.8x	Good beats 96%	18.5x	8.6x	≈ In line
Free cash flow yield	-2.2%	Bad beats 1%	3.8%	-1.9%	≈ In line
Cash flow
Free cash flow margin	-1.5%	Bad beats 1%	13.8%	-1.4%	≈ In line
Cash from operations / net income	3.02	Good beats 97%	1.39	4.18	▼ Worse
Accruals (lower is better)	−5.6%	Good beats 79%	−3.2%	–	–
Efficiency
Days sales outstanding	1 days	Good beats 99%	57 days	1 days	≈ In line

These ratings compare companies with each other and describe the past; they are not a forecast, a recommendation or part of the X-Ray Score. A factor is left out when its data is missing or meaningless (for example a P/E on negative earnings). A dash in the history columns means fewer than three usable years.

Fundamentals checklist

● 4 Good · ● 3 Average · ● 7 Bad

Cash quality

Earnings backed by cashGood

Free-cash-flow yieldBad

Risk models

Altman Z''Bad

Piotroski F-ScoreGood

Growth

EPS growth (3y)Bad

Revenue growth (3y)Average

Growth consistencyAverage

Balance sheet

Current ratioBad

Net debt / EBITDAGood

Interest coverBad

Valuation

Fair value vs priceGood

EBIT / EV yieldAverage

Profitability

Return on invested capitalBad

Operating marginBad

Each check is graded against the company's sector, not a fixed number. Checklist score 36/100.

Financials

	FY21	FY22	FY23	FY24	FY25
Revenue	$15.8B	$23.8B	$26.1B	$27.5B	$28.1B
Operating income	$1.7B	$1.0B	$224M	$321M	$428M
Net income	$977M	$539M	$465M	$465M	$441M
Operating cash flow	$2.3B	$3.8B	$3.2B	$462M	$1.8B
Operating margin	10.9%	4.3%	0.9%	1.2%	1.5%
Free cash flow	$1.8B	−$134M	−$356M	−$1.6B	−$831M
Diluted EPS	$1.61	$0.87	$0.76	$0.76	$0.79

Fiscal years, from SEC filings.

Technical summary

Daily

Neutral

7 bullish · 4 neutral · 5 bearish

Weekly

Neutral

6 bullish · 1 neutral · 5 bearish

Monthly

Strongly bullish

6 bullish · 1 neutral · 1 bearish

Moving averages (daily)

SMA 10	40.31	Bullish
EMA 10	40.51	Bullish
SMA 20	41.17	Bullish
EMA 20	40.72	Bullish
SMA 50	40.66	Bullish
EMA 50	41.42	Bullish
SMA 100	43.71	Bearish
EMA 100	42.08	Bearish
SMA 200	43.15	Bearish
EMA 200	41.37	Bullish

Oscillators (daily)

RSI (14)	55.72	Neutral
MACD (12, 26)	-0.27	Bearish
Momentum (12)	-0.99	Bearish
Stochastic %K (14)	75.75	Neutral
Williams %R (14)	-24.25	Neutral
CCI (20)	-18.36	Neutral

Pivot points (classic, last session)

36.33

37.49

39.76

Pivot

40.92

43.19

44.35

46.62

Signals describe what the chart is doing, not what to do. Moving averages: price above the average is bullish. Oscillators use the usual thresholds (RSI 30/70, Stochastic 20/80, CCI ±100, Williams %R −80/−20; MACD and momentum above zero are bullish). Weekly and monthly views use closing prices only.

Dividends

Paid, last 12 months

0.72 USD

Yield on today's price

1.71%

Frequency

Quarterly

Next ex-dividend date

Not announced

Ex-dividend date	Amount per share
3 Sep 2026	0.1800
11 Jun 2026	0.1800
12 Mar 2026	0.1800
26 Dec 2025	0.1800
3 Sep 2025	0.1800
18 Jun 2025	0.1800
12 Mar 2025	0.1800
26 Dec 2024	0.1800
4 Sep 2024	0.1800
18 Jun 2024	0.1800
5 Mar 2024	0.1800
20 Dec 2023	0.1800

Ex-dividend dates and amounts from EODHD. Shown as declared, before tax.

ETFs that hold LUV

ETF	Share of the fund
JETS U.S. Global Jets	10.65%
IYT iShares Transportation Average	2.81%
WTV WisdomTree U.S. Quality Shareholder Yi...	1.93%
RSPN Invesco S&P 500 Equal Weight Industria...	1.29%
JAVA JPMorgan Active Value	1.21%
SPHB Invesco S&P 500 High Beta	0.80%
RPV Invesco S&P 500 Pure Value	0.65%
RDVY First Trust Rising Dividend Achievers	0.59%

The eight funds with the largest weight in LUV among the ETFs we cover, from each fund's latest SEC Form N-PORT (quarter-end positions, so they can be months old). All ETFs.