---
title: Southwest Airlines (LUV) — intrinsic value and fair price
canonical: https://sweetvaluelab.com/stocks/luv
ticker: LUV
as_of: 2026-10-17
sector: Industrials
industry: Airlines, Airports & Air Services
---
# Southwest Airlines (LUV)

Southwest Airlines (LUV) closed at $39.50 on Oct 16, 2026, undervalued by 20% vs its model value of $49.29 (from its peers' median P/E).

## Key figures

| Figure | Value |
| --- | ---: |
| Last close | $39.50 (Oct 16, 2026) |
| Model value (from its peers' median P/E) | $49.29 |
| Price vs model | undervalued by 20% vs model |
| Range of that model | $43.17 – $66.32 |
| Market value | $19.3B |
| P/E (fiscal 2025) | 50.0 |
| Net margin (fiscal 2025) | 1.6% |
| Free cash flow (fiscal 2025) | -$831.0M |
| Dividend yield (trailing twelve months) | 1.82% |
| Beta | 1.16 |
| Cost of capital (WACC) | 8.51% |
| Business classification | Cyclical (Low/slowing growth (~4% recent), Decelerated from ~25% 5y CAGR, Thin margins (1.6% net margin), Pays dividends, Highly cyclical earnings, Negative free cash flow) |

## Dividends

| Figure | Value |
| --- | ---: |
| Trailing dividend yield | 1.82% |
| Dividends per share, last 12 months | $0.72 |
| Coverage | — |
| Raised | — |
| Growth over 3 years | 0.0% a year |
| Latest payment | $0.18, ex-date Sep 3, 2026, paid Sep 24, 2026 |

| Year of payments | Dividends per share |
| --- | ---: |
| To Sep 5, 2023 | $0.72 |
| To Sep 4, 2024 | $0.72 |
| To Sep 3, 2025 | $0.72 |
| Trailing twelve months (to Sep 3, 2026) | $0.72 |

## Valuation models

Each model's value per share and the role the engine gave it for this business. The headline above is one model's value; every other model is listed with its own, and each has a page of its own under the valuation. Computed Oct 17, 2026.

| Model | Role | Value per share | Low | High |
| --- | --- | ---: | ---: | ---: |
| DCF · Perpetuity growth · 5y | primary | $0.00 | $0.00 | $0.00 |
| DCF · Perpetuity growth · 10y | cross check | $0.00 | $0.00 | $0.00 |
| DCF · EBITDA exit · 5y | cross check | $44.24 | $21.70 | $71.00 |
| DCF · EBITDA exit · 10y | cross check | $37.73 | $16.41 | $67.02 |
| P/E · peers | cross check | $49.29 | $43.17 | $66.32 |
| P/E · own history | cross check | $71.15 | $57.51 | $80.28 |
| PEG | sanity check | $71.89 | $71.89 | $71.89 |
| EV/EBITDA · peers | cross check | $28.16 | $26.09 | $30.23 |
| EV/Revenue · peers | cross check | $35.42 | $27.52 | $40.02 |
| Earnings power value | cross check | $7.67 | $6.07 | $9.95 |
| Dividend discount | cross check | $17.18 | $12.25 | $24.30 |

## Insider activity (SEC Form 4)

No open-market insider buys or sales filed in the past 90 days.

| Date | Insider | Relationship | Transaction | Shares | Value |
| --- | --- | --- | --- | ---: | ---: |
| Sep 15, 2026 | Martinez Jimmy Ryan | Principal Accounting Officer | Grant / award | 2,697 | $0 |
| Aug 21, 2026 | Martinez Jimmy Ryan | Principal Accounting Officer | Tax withholding | 179 | $7,228 |
| Aug 10, 2026 | Krishna Varun | Director | Grant / award | 3,787 | $0 |
| Aug 10, 2026 | Liberty Jason T | Director | Grant / award | 3,787 | $0 |
| Aug 5, 2026 | Jones Justin | EVP & Chief Commercial Officer | Grant / award | 8,568 | $0 |

## Recent SEC filings

| Filed | Form | What | Filing |
| --- | --- | --- | --- |
| Aug 12, 2026 | 8-K | 1.01 Entry into a Material Agreement; 1.02 Termination of a Material Agreement; 2.03 Creation of a Direct Financial Obligation; 9.01 Financial Statements and Exhibits | https://www.sec.gov/Archives/edgar/data/92380/000009238026000098/luv-20260810.htm |
| Aug 10, 2026 | 8-K | 5.02 Departure/Election of Directors or Officers | https://www.sec.gov/Archives/edgar/data/92380/000009238026000093/luv-20260810.htm |
| Aug 7, 2026 | 8-K | 5.02 Departure/Election of Directors or Officers | https://www.sec.gov/Archives/edgar/data/92380/000119312526340284/d101890d8k.htm |
| Jul 23, 2026 | 10-Q | Quarterly report | https://www.sec.gov/Archives/edgar/data/92380/000009238026000077/luv-20260630.htm |
| Jul 22, 2026 | 8-K | 2.02 Results of Operations (Earnings); 9.01 Financial Statements and Exhibits | https://www.sec.gov/Archives/edgar/data/92380/000009238026000074/luv-20260722.htm |

## Superinvestors holding it (latest 13F)

| Manager | Quarter | Shares | Value |
| --- | --- | ---: | ---: |
| Harry Burn | 2026-06-30 | 2,441,564 | $125.5M |
| Bridgewater | 2026-06-30 | 1,022,946 | $52.6M |
| Robert Olstein | 2026-03-31 | 84,000 | $3.2M |
| First Eagle | 2026-06-30 | 7,000 | $359,940 |

4 tracked managers in all.

## About

Southwest Airlines Co. functions as a passenger airline, offering scheduled air travel services predominantly across the United States and to select neighboring international markets. As of December 31, 2021, the company maintained a consistent fleet of 728 Boeing 737 aircraft. Its extensive route network served 121 different locations, spanning 42 U.S. states, the District of Columbia, and the Commonwealth of Puerto Rico, along with 10 international countries close by. These international destinations include Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. To enhance the passenger journey, Southwest provides in-flight entertainment and internet access on its Wi-Fi-enabled planes. The airline also runs the Rapid Rewards loyalty program, enabling members to accumulate points proportional to the money spent on…

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Source: https://sweetvaluelab.com/stocks/luv (SweetValueLab, free, no account). Prices and statements from Financial Modeling Prep; filings from SEC EDGAR. Research and educational data, not investment advice; nothing here is a recommendation to buy, sell or hold any security.